Two key NBFCs faced the heat of the Reserve Bank of India (RBI) as they wered fined by the central bank over violations of fair practices and KYC norms.
A monetary penalty of Rs 10 lakh has been imposed on Poonawalla Fincorp Limited while of Rs 4.90 lakh on Hinduja Leyland Finance Limited.
Poonawalla Fincorp Limited
It was found by the RBI, after the statutory inspection, that the Poonawalla Fincorp Limited charged interest on loans from dates prior to the dates of disbursal of these loans, which was contrary to the terms and conditions of the loans communicated to the customers.
The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2022.
Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why maximum penalty should not be imposed on it for its failure to comply with the said directions.
The NBFC was penalised for non-compliance with certain provisions of the ‘Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016’ issued by RBI, relating to ‘Fair Practices Code for NBFCs’.
Hinduja Leyland Finance Limited
RBI said the NBFC did not put into use a robust software to throw alerts when the transactions were inconsistent with risk categorization and updated profile of the customers, as part of effective identification and reporting of suspicious transactions.
The action was taken for non-compliance with certain provisions of the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016.
RBI has said that theses actions are based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers.
