Recorded RBI impact
Fine: Rs 20.0 L
Monetary penalty · Fresh imposition
Published by RBI
16 Nov 2023
Case Brief
RBI imposed a monetary penalty of ₹20 lakh on Anand Rathi Global Finance Limited, Mumbai, Maharashtra, by order dated October 30, 2023. The penalty was levied for non-compliance with certain provisions of the RBI (Know Your Customer (KYC)) Directions, 2016, after a statutory inspection found that the company failed to conduct ongoing due diligence of customers, including risk categorisation and effective identification and reporting of suspicious transactions through robust software. RBI said the action was based on regulatory compliance deficiencies and did not pronounce on the validity of any customer transactions or agreements.
Why RBI Acted
RBI imposed a monetary penalty under section 58G(1)(b) read with section 58B(5)(aa) of the RBI Act, 1934 after a statutory inspection found non-compliance with the RBI (Know Your Customer (KYC)) Directions, 2016. The inspection revealed that the company did not undertake ongoing due diligence of customers, did not carry out risk categorisation, and did not use robust software for effective identification and reporting of suspicious transactions.
Operating Impact
The company must absorb the penalty and strengthen its KYC/AML controls, especially ongoing due diligence, customer risk categorisation, and suspicious transaction monitoring. The release has no stated restriction on business operations beyond the financial penalty, but it signals tighter compliance expectations for the firm’s customer onboarding and monitoring processes.
Regulatory Basis
- 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
- Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016
Action Facts
- Primary Impact
- Fine: Rs 20.0 L
- Order Date
- 30 Oct 2023
- Effective From
- 30 Oct 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC