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GoCapital Finance Limited

NBFCChennai, Tamil Nadu

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 1.00 L

Monetary penalty · Fresh imposition

S1

Published by RBI

17 Oct 2024

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on GoCapital Finance Limited, Chennai, Tamil Nadu, for non-compliance with certain provisions of the Master Direction on NBFC Scale Based Regulation, 2023. RBI found that the company failed to obtain prior written permission before effecting a change in management that led to a change of more than 30% of its directors, excluding independent directors. The penalty was imposed after considering the company’s reply and oral submissions in a personal hearing, and RBI stated that the action is based on regulatory deficiency and does not pronounce on the validity of transactions with customers.

Why RBI Acted

Governance oversightReporting & disclosureLicensing breach

RBI imposed a monetary penalty under section 58G(1)(b) read with section 58B(5)(aa) of the RBI Act, 1934 for non-compliance with provisions of the Master Direction – RBI (Non-Banking Financial Company-Scale Based Regulation) Directions, 2023. The non-compliance arose from correspondence regarding intimation of appointment of an additional director, which revealed that the company changed its management without prior written RBI approval, resulting in a change of more than 30% of its directors (excluding independent directors).

Operating Impact

GoCapital Finance Limited must absorb the penalty and remain subject to RBI scrutiny for the governance lapse. The order does not itself restrict ongoing customer transactions, but it signals compliance expectations around prior RBI approval for material management changes and may be followed by further regulatory action if warranted.

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
  • Master Direction-Reserve Bank of India (Non-Banking Financial Company-Scale Based Regulation) Directions, 2023

Action Facts

Primary Impact
Fine: Rs 1.00 L
Order Date
7 Oct 2024
Effective From
7 Oct 2024
Entities Affected
1
Entity Role
Primary
Entity Type
NBFC