(MENAFN- KNN India)
New Delhi, Sep 14 (KNN)
In a move signalling its commitment to maintaining strict regulatory oversight, the Reserve bank of India (RBI) has imposed substantial fines on three non-banking financial companies (NBFCs) for various compliance failures.
The penalties, ranging from Rs 7,90,000 to Rs 23,10,000, were levied between September 3 and September 11, 2024, underscoring the central bank's zero-tolerance approach towards regulatory lapses.
The companies facing punitive action are Hewlett Packard Financial Services (India) Private Limited, SMFG India Credit Company Limited (formerly Fullerton India Credit Company Limited), and Muthoot Vehicle & Asset Finance Limited.
Each entity was found to have violated different aspects of RBI's regulatory framework, including Know Your Customer (KYC) guidelines, IT security measures, and liquidity risk management protocols.
Hewlett Packard Financial Services bore the brunt of a Rs 10,40,000 fine for non-compliance with KYC guidelines applicable to systemically important non-deposit-taking NBFCs. The penalty was imposed following an RBI inspection based on the company's financial position as of March 31, 2022.
SMFG India Credit Company faced the heftiest penalty of Rs 23,10,000 for breaching RBI's Information Technology and cybersecurity guidelines.
A control gap assessment in April 2023 revealed significant oversights, including failure to include provisions for monitoring outsourced vendors and neglecting to conduct crucial IS audits for network and security systems.
Muthoot Vehicle & Asset Finance was slapped with a Rs 7,90,000 fine for multiple infractions, including failure to disclose its Liquidity Coverage Ratio on its website, non-submission of customer data to credit information companies, and not issuing loan sanction letters in vernacular languages to vehicle loan borrowers.
These penalties serve as a stark reminder of the RBI's vigilance in enforcing regulatory compliance across the financial sector.
The central bank emphasised that the fines were based solely on compliance deficiencies and not on the validity of any transactions or agreements entered into by these companies.
As the financial landscape continues to evolve, this crackdown sends a clear message to NBFCs about the importance of adhering to regulatory norms.
It also highlights the RBI's proactive stance in safeguarding the interests of consumers and maintaining the integrity of India's financial system.
Industry experts suggest that this move by the RBI could prompt other NBFCs to conduct internal audits and strengthen their compliance mechanisms to avoid similar penalties.
The coming months may see increased vigilance and self-regulation within the sector as companies scramble to align their operations with RBI's stringent guidelines.
(KNN Bureau)
MENAFN14092024000155011030ID1108673818
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.