Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
22 Aug 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on M/s Swagatam Marketing Private Limited, Kolkata, a Non-Systemically Important, Non-Deposit taking NBFC. RBI found that the company changed its management without prior approval, thereby violating RBI directions on change in management for NBFCs. The penalty was imposed after the company was issued a show-cause notice, and RBI considered its reply and oral submissions before concluding that the contravention was substantiated.
Why RBI Acted
RBI imposed a monetary penalty for contravention of its directions applicable to Non-Systemically Important, Non-Deposit taking NBFCs regarding change in management. The company had changed its management without prior approval of the Reserve Bank of India, failing to adhere to the extant RBI directions; after notice, reply, and oral submissions, RBI held the non-compliance substantiated and imposed the penalty under section 58G read with section 58B(5)(aa) of the RBI Act, 1934.
Operating Impact
The company must bear the monetary penalty; the release does not state any additional operational restriction or cancellation. The action serves as a compliance warning for the NBFC and highlights RBI’s requirement that management changes receive prior approval.
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 1.00 L
- Order Date
- 16 Aug 2022
- Effective From
- 16 Aug 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC