Recorded RBI impact
Fine: Rs 3.20 L
Monetary penalty · Fresh imposition
Published by RBI
6 Nov 2023
Case Brief
RBI imposed a monetary penalty on Early Salary Services Private Limited, Pune, by order dated September 15, 2023. The company was found to have failed to put in place a system of internal audit for all outsourced activities, breaching the Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016. RBI issued a show-cause notice after a supervisory visit/scrutiny, considered the company’s reply and submissions, and then concluded that the contravention was substantiated and warranted the penalty.
Why RBI Acted
Following a supervisory visit/scrutiny in October 2021, RBI found that the company had not implemented an internal audit system for all outsourced activities, contrary to the Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016. After issuing a show-cause notice and considering the company's reply and oral submissions, RBI concluded that the non-compliance was substantiated and imposed a monetary penalty under Section 58G(1)(b) read with Section 58B(5)(aa) of the RBI Act, 1934.
Operating Impact
The company must absorb the monetary penalty; the release does not describe any additional restriction on operations. The finding reflects a compliance breach in outsourced-activity oversight under RBI’s NBFC directions, but the order itself does not state a customer-facing operational ban or restriction.
Regulatory Basis
- Section 58G (1) (b) read with Section 58B (5) (aa) of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- Fine: Rs 3.20 L
- Order Date
- 15 Sept 2023
- Effective From
- 15 Sept 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC