Recorded RBI impact
Monetary penalty
Monetary penalty · Fresh imposition
Published by RBI
3 Nov 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty on Mercedes-Benz Financial Services India Private Limited, formerly Daimler Financial Services India Private Limited, Pune, Maharashtra. The action followed a statutory inspection that found non-compliance with certain provisions of the RBI (Know Your Customer) Direction, 2016, specifically that the company failed to carry out ongoing due diligence and did not undertake periodic updation of KYC for its high-risk customers as of March 31, 2021. RBI issued a show-cause notice, considered the company’s reply and hearing submissions, and concluded that the contravention was substantiated.
Why RBI Acted
RBI imposed a monetary penalty after its statutory inspection found that the company did not carry out ongoing due diligence of customers and failed to undertake periodic updation of KYC for high-risk customers as of March 31, 2021. The penalty was imposed for non-compliance with certain provisions of the Reserve Bank of India (Know Your Customer (KYC)) Direction, 2016, under Section 58G read with Section 58B(5)(aa) of the RBI Act, 1934.
Operating Impact
The company must absorb the ₹10 lakh penalty; the release does not describe any operational restriction, but it underscores the need to strengthen KYC controls, especially ongoing due diligence and periodic KYC updates for high-risk customers. No direct restrictions are imposed on customers or counterparties.
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
- Reserve Bank of India (Know Your Customer (KYC)) Direction, 2016
Action Facts
- Primary Impact
- Monetary penalty
- Order Date
- 30 Oct 2023
- Effective From
- 30 Oct 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC
Related Entities
Entities similar to Mercedes-Benz Financial Services India Private Limited