The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3.10 lakh on JM Financial Products Limited for failing to comply with certain provisions of RBI’s Master Direction for Non-Banking Financial Companies (NBFCs). The penalty was issued through an order dated March 03, 2025, under RBI’s authority as per Section 58G(1)(b) read with Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.
Reason for the Penalty
RBI conducted a statutory inspection of JM Financial Products Limited’s financial records as of March 31, 2023, and identified non-compliance with its regulatory directions. Following these findings, RBI issued a show-cause notice, asking the company to explain why a penalty should not be imposed. After reviewing the company’s written and oral submissions, RBI confirmed the following violation:
- Failure to disclose a material related party transaction – The company did not disclose an important related party transaction in its Annual Report, which is a regulatory requirement.
RBI’s Action and Clarification
RBI clarified that the penalty is imposed solely due to non-compliance with regulatory guidelines and does not impact the validity of any transactions or agreements made by JM Financial Products Limited. Additionally, RBI retains the right to take further action against the company if needed.
