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Approximately three weeks after the Reserve Bank of India (RBI) filed a plea for corporate insolvency resolution proceedings (CIRP) against Delhi NCR-based AVIOM India Housing Finance, the National Company Law Tribunal (NCLT) has admitted the petition. Earlier, the RBI had superseded AVIOM's board due to governance concerns and payment defaults, appointing Ram Kumar, former Chief General Manager of Punjab National Bank, as its Administrator. The decision was based on the National Housing Bank's recommendation. RBI also established a three-member advisory committee to assist the Administrator, which will continue overseeing AVIOM's operations.
Three weeks after the Reserve Bank of India (RBI) submitted a plea to initiate corporate insolvency resolution proceedings (CIRP) against Delhi NCR-based non-banking financial company (NBFC) AVIOM India Housing Finance, the National Company Law Tribunal (NCLT) has granted approval for the petition. Advertisement
Earlier, the Reserve Bank had taken action by superseding AVIOM's board due to governance concerns and defaults in fulfilling various payment obligations. Following this, the central bank appointed Ram Kumar, former Chief General Manager of Punjab National Bank, as the company's Administrator. This measure was undertaken based on the recommendation of the National Housing Bank (NHB).
In a statement released in November 2024, AVIOM India Housing Finance acknowledged that it had detected fraudulent activities within the company and had subsequently lodged a complaint with the Economic Offences Wing (EOW). The firm had also admitted facing liquidity constraints, which were expected to result in delays in interest payments.
RBI had approached the NCLT under the Financial Service Providers (FSP) Insolvency Rules, 2019, which resulted in the enforcement of an interim moratorium. As per the 2019 guidelines, only a regulatory body has the authority to refer a financial services provider to the bankruptcy tribunal. This restricted legal proceedings, asset transfers, and recovery actions against AVIOM India Housing Finance.
Subsequently, the central bank filed an application with the NCLT, New Delhi bench, seeking the initiation of CIRP against the company. RBI also constituted a three-member advisory committee to support Administrator Ram Kumar in overseeing the company's operations. The committee comprises Paritosh Tripathi, former Chief General Manager of State Bank of India, Rajneesh Sharma, former Chief General Manager of Bank of Baroda, and Sanjaya Gupta, former Managing Director & CEO of PNB Housing Finance.
Established in 2016 by Kajal Ilmi, AVIOM India Housing Finance is headquartered in New Delhi. As of 31 March 2024, its loan book stood at INR 1,752.4 crore, an increase from INR 1,034.9 crore a year earlier, according to rating agency Icra Ltd. The company has received backing from multiple prominent lenders, including Utkarsh Small Finance Bank, HDFC Bank, Suryoday Small Finance Bank, LIC Housing Finance, and State Bank of India. Additionally, its international lenders include US International Development Finance Corporation, BlueOrchid, and Triple Jump, among others.
For the financial year 2024, AVIOM India Housing Finance reported a net profit of INR 42.5 crore, while its revenue reached INR 416.8 crore. The sanctioned loan amount totalled INR 1,477.3 crore, significantly rising from INR 589.2 crore in the previous financial year. But after the fraud detection, the company has halted most of its activities.
The NCLT's acceptance of RBI's plea for CIRP against AVIOM India Housing Finance marks a crucial step in addressing the company's financial and governance challenges. It also highlights RBI's continued commitment to safeguarding financial stability in the NBFC sector.
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