The Reserve Bank of India (RBI) imposed monetary penalties on three non-banking financial companies (NBFCs) for regulatory lapses and non-compliance with various RBI directives.
The RBI notifications on Friday highlighted that these penalties, issued between 03 September and 11 September 2024, were levied on Hewlett Packard Financial Services (India), SMFG India Credit Company, and Muthoot Vehicle & Asset Finance.
On 03 September 2024, the RBI imposed a penalty of Rs 10,40,000 on Hewlett Packard Financial Services (India). This action was taken following an inspection by the RBI based on the company's financial position as of 31 March 2022.
The penalty was levied due to non-compliance with the 'know your customer (KYC)' guidelines and other directives applicable to systemically important non-deposit-taking NBFCs.
"This penalty has been imposed in exercise of powers conferred on RBI under the provisions of clause (b) of sub-section (1) of section 58 G read with clause (aa) of sub-section (5) of section 58 B of the Reserve Bank of India Act, 1934" said the RBI.
On 04 September 2024, SMFG India Credit Company (formerly known as Fullerton India Credit Company) was fined Rs 23,10,000 for violating RBI's information technology (IT) and cybersecurity guidelines.
As per RBI, during a control gap assessment in April 2023, it found that the company failed to include provisions for monitoring and oversight in its contracts with outsourced vendors, neglected to conduct IS audits for network and security systems, and did not retain critical audit logs.
On 11 September 2024, Muthoot Vehicle & Asset Finance was penalised Rs 7,90,000 for failing to comply with RBI's liquidity risk management framework and other relevant guidelines.
According to RBI, the statutory inspection revealed that the company had failed to disclose its liquidity coverage ratio (LCR) on its website, did not submit customer data to credit information companies, and failed to issue loan sanction letters in the vernacular language to vehicle loan borrowers.
In each case, the RBI clarified that the penalties were based solely on regulatory compliance deficiencies and were not judgments on the validity of any transactions or agreements. Further actions may be taken by the RBI against these companies if deemed necessary. (ANI)
