PIL alleges PNB Housing engaged in illegal lending practice, HC seeks stand of National Housing Bank

The Delhi High Court on Monday sought response from the National Housing Bank, the principal agency to promote housing finance institutions in the country, on a PIL which alleged that PNB Housing Finance Ltd was engaged in "malicious and illegal predatory lending practice" and sought its audit by NHB.

A bench of Chief Justice Rajendra Menon and Justice A J Bhambhani issued notices to the NHB, a subsidiary of RBI, and PNB Housing Finance Ltd and sought their stand on the plea by August 9.

The petition by Abhijit Mishra has contended that PNB Housing Finance was defaulting on NHB's master circular on disbursement of housing loans to individuals by not linking it with the stages of construction.

It has sought that PNB Housing be audited by the NHB in connection with the alleged violation of the master circular and to take appropriate action against it.

Mishra has alleged that PNB Housing has "has not complied with the primary and essential fiduciary responsibility of monitoring of the housing project development as per the tripartite agreement".

He has also claimed that the firm disregarded the circular issued by the Greater Noida Industrial Development Authority regarding defaulting builders.

"...malicious and illegal predatory lending practice by the PNB Housing Finance Limited has exposed the financial institutions as well as their home loan borrowers to additional risks..," the petition has alleged.