Recorded RBI impact
Fine: Rs 10.0 L
Monetary penalty · Fresh imposition
Published by RBI
26 Mar 2025
Case Brief
RBI, by order dated March 24, 2025, imposed a monetary penalty on KLM Axiva Finvest Limited for non-compliance with RBI requirements on declaration of dividends under the Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023. RBI said the company declared a dividend for FY 2023-24 despite not meeting the minimum prudential requirements in each of the last three financial years. The penalty was imposed after a show-cause notice, the company’s reply, and oral submissions at a personal hearing.
Why RBI Acted
RBI imposed a monetary penalty under Section 58G read with Section 58B(5)(aa) of the RBI Act, 1934 for non-compliance with the RBI directions on 'Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023' relating to declaration of dividends. The company had declared an interim dividend / dividend for FY 2023-24 even though it had not met the minimum prudential requirements in each of the last three financial years. After notice, reply, and oral submissions, RBI sustained the charge and imposed the penalty.
Operating Impact
KLM Axiva Finvest Limited must bear the ₹10 lakh penalty, but the release does not impose an operational restriction or cancel any authorization. The finding may also support any further action RBI chooses to initiate in future, but no additional forward-looking restriction is stated in this order.
Regulatory Basis
- clause (b) of sub-section (1) of Section 58G
- clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- Fine: Rs 10.0 L
- Order Date
- 24 Mar 2025
- Effective From
- 24 Mar 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC