National Housing Bank set to conduct forensic audit of SRG Housing Finance

National Housing Bank has initiated a forensic audit of SRG Housing Finance amid allegations of questionable lending practices. The examination is expected to test whether loan accounts were genuine, supported by adequate records and matched by accurate repayment histories. Auditors will review consumer information and the processes used to originate loans, focusing on indications of fraud. Earlier findings had identified possible fictitious lending of Rs 300 crore to Rs 400 crore. The material does not specify the audit's timetable or whether any allegation has been established.

For Indian markets, the immediate exposure is SRG Housing Finance, because any verified gap in loan documentation or collections could affect perceptions of asset quality, reported earnings and funding access. The wider housing finance and non bank lending sectors may also face closer scrutiny of underwriting, customer verification and repayment reporting, though no broader problem is established. Consumer durables could see an indirect sentiment effect because financing supports household purchases. The sector is down 8.5% over 1 month and up 0.3% over 3 months. Audit findings, account reconciliations and regulator disclosures would confirm the concern, while clean records and contained exposure would weaken it.