Shri Ram Finance Corporation Private Limited

RBI imposed a monetary penalty after a statutory inspection and subsequent show-cause process found sustained charges of non-compliance with certain provisions of the RBI directions on Governance and the Reserve Bank of India (Know Your Customer (KYC)) Directions. The company failed to obtain prior written permission from RBI while appointing a director that resulted in a change in management (more than 30% of directors changed, excluding independent directors), failed to put in place a system to categorize customers into low/medium/high-risk buckets, and failed to upload KYC records of certain customers to the Central KYC Records Registry within the prescribed timeline. The penalty was imposed under section 58G(1)(b) read with section 58B(5)(aa) of the RBI Act, 1934.

The company must absorb the monetary penalty and address the compliance gaps identified by RBI. Forward-looking implications include stronger governance controls around board/management changes, customer risk classification, and timely CKYCR uploads; RBI also retains the option to initiate further action if warranted.