Recorded RBI impact
Fine: Rs 12.3 L
Monetary penalty · Fresh imposition
Published by RBI
9 Sept 2022
Case Brief
RBI imposed a monetary penalty of Rs 12.35 lakh on Indiabulls Commercial Credit Limited, New Delhi, by order dated September 07, 2022. The penalty was for non-compliance with certain provisions of the RBI (Know Your Customer) Directions, 2016, after inspection and subsequent proceedings found that the company failed to allot UCIC to individual customers and did not categorise customers based on its assessment and risk perception. RBI stated that the penalty was imposed under the RBI Act, 1934 and that the action was based on regulatory deficiencies, not on the validity of any customer transaction or agreement.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and subsequent show-cause process found that Indiabulls Commercial Credit Limited had not complied with certain provisions of the RBI (Know Your Customer) Directions, 2016. The specific deficiencies recorded were failure to allot Unique Customer Identification Codes (UCIC) to individual customers and failure to categorise customers based on the company’s assessment and risk perception. RBI concluded that the contraventions were substantiated and warranted penalty under the RBI Act, 1934.
Operating Impact
The company must bear the monetary penalty and continue complying with RBI KYC requirements going forward. The order does not invalidate customer transactions, but it underscores ongoing compliance obligations relating to customer identification and risk categorisation.
Regulatory Basis
- 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 12.3 L
- Order Date
- 7 Sept 2022
- Effective From
- 7 Sept 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC