Abstract

Dewan Housing Finance Corporation Ltd. (DHFL) is a non- banking financial company (NBFC) which grants house loans to the middle- lower income class families who wants to achieve home-ownership aspirations in semi-urban and rural India. Unlike banks, NBFCs are the companies established under Companies Act, 2013 having the primary and principal business of receiving deposits and with the use of such deposits, the endowment of loans to the needy suits possible. DHFL was incorporated in the year 1984 in the state of Maharashtra by Rajesh Kumar Wadhwan. In the year 2019, Cobrapost popped up as a whistleblower and alleged the financial company to be indulged in illegal activities which incorporates the transferring of depositor’s money to shell companies and further round tripping of those amounts for company’s own illicit and mala fide profits. This research attempts to give a brief explanation of DHFL Company along with the connotation of NBFCs and their working in our country. Further it elucidates the timeline of events including the details of the scam and the way they pulled this scam off. Subsequently it covers the legal provisions attracted under this scam along with the role of RBI in the whole saga. This paper additionally tries to present the loopholes which aided in the execution of scam next to the similar scams encountered in our country. Assisting the paper, the consequences of the scam and the political interventions are also dealt which has led to more clarification in the DHFL scam. Lastly, this research paper endeavor to provide some effective suggestions and recommendations in order to check these scams followed by the conclusion.

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