Recorded RBI impact
Fine: Rs 10.0 L
Monetary penalty · Fresh imposition
Published by RBI
16 Aug 2024
Case Brief
RBI, by order dated August 12, 2024, imposed a monetary penalty of ₹10.00 lakh on Poonawalla Fincorp Limited, Pune, Maharashtra. The penalty was imposed for non-compliance with RBI’s NBFC Directions relating to Fair Practices Code for NBFCs. After supervisory inspection, a show-cause notice, and consideration of the company’s reply and oral and written submissions, RBI sustained the charge that the company had charged interest on loans from dates prior to their disbursal, contrary to the terms and conditions communicated to customers. RBI stated that the penalty is based on regulatory-compliance deficiencies and is without prejudice to any other action that may be initiated.
Why RBI Acted
RBI imposed a monetary penalty under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934 after supervisory inspection and examination of the company’s reply and submissions. The sustained charge was that Poonawalla Fincorp Limited charged interest on loans from dates prior to the dates of disbursal, which was contrary to the loan terms and conditions communicated to customers, amounting to non-compliance with the 2016 NBFC Directions relating to Fair Practices Code for NBFCs.
Operating Impact
Poonawalla Fincorp must absorb the monetary penalty and address the compliance lapse in its lending practices. The order does not itself restrict ongoing business operations, but it signals RBI scrutiny over how interest is computed and disclosed to customers on loans.
Regulatory Basis
- clause (b) of sub-section (1) of section 58 G
- clause (aa) of sub-section (5) of section 58 B of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- Fine: Rs 10.0 L
- Order Date
- 12 Aug 2024
- Effective From
- 12 Aug 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC