Recorded RBI impact
Fine: Rs 2.10 L
Monetary penalty · Fresh imposition
Published by RBI
30 Aug 2024
Case Brief
By an order dated August 26, 2024, RBI imposed a monetary penalty of ₹2,10,000 on Cent Bank Home Finance Limited. The action was taken after a statutory inspection by the National Housing Bank and subsequent supervisory proceedings found non-compliance with certain provisions of the RBI's KYC Directions, 2016. RBI specifically noted that the company failed to carry out periodic review of risk categorisation of accounts at least once in six months during FY 2021-22. The penalty was imposed under section 52A of the National Housing Bank Act, 1987, and RBI stated that it was without prejudice to any other action that may be initiated.
Why RBI Acted
RBI imposed a monetary penalty under section 52A of the National Housing Bank Act, 1987 after supervisory findings showed non-compliance with certain provisions of the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016. The sustained charge was that the company failed to perform periodic review of risk categorisation of accounts with the required six-monthly periodicity during FY 2021-22.
Operating Impact
Cent Bank Home Finance Limited must absorb the monetary penalty and address the compliance lapse in its KYC controls, especially the periodic review of account risk categorisation. The order does not itself impose an operational restriction on customers, but RBI may take further action if related deficiencies persist.
Regulatory Basis
- section 52A of the National Housing Bank Act, 1987
- Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016
Action Facts
- Primary Impact
- Fine: Rs 2.10 L
- Order Date
- 26 Aug 2024
- Effective From
- 26 Aug 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC