RBI imposes Monetary Penalty on M/s Shriram City Union Finance Ltd
Case Brief
RBI imposed a monetary penalty of ₹20 lakh on M/s Shriram City Union Finance Ltd. under section 58G(1)(b) read with section 58B(5)(aa) of the RBI Act, 1934. The penalty followed scrutiny of sample loan accounts that found violations of RBI's Fair Practices Code guidelines and other directions/orders issued from time to time; RBI issued a show-cause notice, held a personal hearing, and then concluded the violations were substantiated.
A scrutiny of sample loan accounts conducted under section 45N of the RBI Act, 1934 during November 2015 found that the company had violated various provisions of the Fair Practices Code guidelines issued by RBI under section 45L of the Act. The company was issued a show-cause notice on August 1, 2016 for contraventions of RBI directions, and after a personal hearing on February 14, 2017, RBI held the violations to be substantiated and imposed a monetary penalty under section 58G(1)(b) read with section 58B(5)(aa) of the RBI Act, 1934.
Severity Assessment
A monetary penalty of ₹20 lakh falls in severity band 3, and there is no broader operational restriction.
The company must absorb the financial penalty and the adverse finding on compliance. No explicit operational restriction is imposed in this release, but the action signals RBI scrutiny of the company’s lending conduct and fair-practices compliance.
Published as M/s Shriram City Union Finance Ltd.
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