Recorded RBI impact
Fine: Rs 2.33 Cr
Monetary penalty · Fresh imposition
Published by RBI
8 Aug 2022
Case Brief
By an order dated August 05, 2022, RBI imposed a monetary penalty of Rs 2.33 crore on Spandana Sphoorty Financial Limited, Hyderabad, an NBFC-MFI. The penalty was imposed for non-compliance with certain provisions of the RBI’s NBFC-Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016. RBI’s statutory inspections and related supervisory review found that the company had failed to adhere to pricing of credit guidelines applicable to microfinance institutions. After issuing a show-cause notice and considering the company’s written and oral submissions, RBI concluded that the charge of non-compliance was substantiated and warranted penalty under the RBI Act, 1934.
Why RBI Acted
RBI imposed a monetary penalty after statutory inspections and supervisory examination found that the company failed to adhere to pricing of credit guidelines applicable to NBFC-MFIs under the NBFC-Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016. RBI issued a show-cause notice, considered the company’s reply and oral submissions, and concluded the non-compliance was substantiated. The penalty was imposed under section 58G(1)(b) read with section 58B(5)(aa) of the RBI Act, 1934.
Operating Impact
The company must absorb the financial penalty and remain compliant with the applicable NBFC directions going forward. The release does not announce any operational restriction, but it signals continued regulatory scrutiny over the company’s lending-pricing practices.
Regulatory Basis
- clause (b) of sub-section (1) of section 58 G read with clause (aa) of sub-section (5) of section 58 B of the Reserve Bank of India Act, 1934
- Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016
Action Facts
- Primary Impact
- Fine: Rs 2.33 Cr
- Order Date
- 5 Aug 2022
- Effective From
- 5 Aug 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC