Recorded RBI impact
Fine: Rs 52.7 L
Monetary penalty · Fresh imposition
Published by RBI
28 Mar 2025
Case Brief
RBI, by order dated March 24, 2025, imposed a monetary penalty of ₹52.70 lakh on Phoenix ARC Private Limited. The penalty was levied for non-compliance with RBI’s directions on ‘Settlement of dues payable by the borrower’ under Section 12 read with Section 30A(1) of the SARFAESI Act, 2002. RBI said the company settled dues of certain borrowers with aggregate outstanding principal of more than ₹1 crore without the prior approval of its Board of Directors, as required by the directions. The action follows a statutory inspection with reference to the company’s financial position as on March 31, 2023, and RBI noted the penalty is without prejudice to any other action that may be initiated.
Why RBI Acted
RBI imposed a monetary penalty on Phoenix ARC Private Limited under Section 12 read with sub-section (1) of Section 30A of the SARFAESI Act, 2002, after supervisory findings showed non-compliance with RBI directions on ‘Settlement of dues payable by the borrower’. The sustained charge was that the company settled dues of certain borrowers having aggregate outstanding principal of more than ₹1 crore without the prior approval of its Board of Directors, as required under those directions.
Operating Impact
Phoenix ARC Private Limited must bear the monetary penalty and remain compliant with RBI directions on borrower settlement, including obtaining prior Board approval where required. The order does not itself impose an operational ban, but RBI has reserved the right to initiate further action if warranted.
Regulatory Basis
- Section 12 read with sub-section (1) of Section 30A of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
Action Facts
- Primary Impact
- Fine: Rs 52.7 L
- Order Date
- 24 Mar 2025
- Effective From
- 24 Mar 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC