Recorded RBI impact
Fine: Rs 6.00 L
Monetary penalty · Fresh imposition
Published by RBI
12 Jan 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹6.00 lakh on Sakthi Finance Limited, Coimbatore, Tamil Nadu, for non-compliance with the RBI (Know Your Customer (KYC)) Directions, 2016. RBI’s inspection found that the company had not undertaken customer risk categorization and had not carried out periodic KYC updation for high-risk customers during FY 2021-22. After considering the company’s reply, additional submissions, and oral submissions, RBI concluded that the charge was substantiated and imposed the penalty under the RBI Act, 1934.
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 Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016. An inspection with reference to the company’s financial position as on March 31, 2022 found that it did not undertake risk categorization of customers and did not carry out periodic updation of KYC for high-risk customers during FY 2021-22, as part of ongoing customer due diligence.
Operating Impact
Sakthi Finance Limited must continue to comply with RBI’s KYC framework, including customer risk categorization and periodic KYC updates for high-risk customers. The penalty itself is a financial consequence and does not, on this text, impose any operational restriction on lending or business activities.
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 6.00 L
- Order Date
- 2 Jan 2024
- Effective From
- 2 Jan 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC