Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
31 Jan 2020
Case Brief
The Reserve Bank of India imposed a monetary penalty on Fortune Integrated Assets Finance Ltd., Mumbai, by order dated January 31, 2020. RBI said the company failed to comply with its 'Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016'. The release also notes that statutory inspection had observed non-compliance with other RBI directions on NBFC systemically important/deposit-taking and non-deposit-taking companies and corporate governance. RBI clarified that the penalty action is based on regulatory compliance deficiencies and does not pronounce on the validity of any transaction or agreement entered into by the company with its customers.
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 finding that the company had failed to comply with RBI's 'Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016'. The background also records non-compliance observed during statutory inspection with 'Non-Banking Financial Companies - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016' and 'Non-Banking Financial Companies – Corporate Governance (Reserve Bank) Directions, 2015'.
Operating Impact
Fortune Integrated Assets Finance Ltd. must bear the ₹2 lakh penalty and ensure compliance with RBI directions going forward, especially those relating to fraud monitoring and broader NBFC governance/reporting requirements. The action has no stated restriction on operations or customer-facing activities beyond the compliance obligations implied by the penalty.
Regulatory Basis
- clause (b) of sub-section (1) of section 58G read with clause (aa) of sub-section (5) of section 58B of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 31 Jan 2020
- Effective From
- 31 Jan 2020
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC