RBI Imposes Penalties on Four Financial Institutions and Cooperative Bank for Regulatory Violations
The Reserve Bank of India (RBI) has imposed monetary penalties on four financial institutions and one urban cooperative bank for failing to comply with various regulatory directions.
Infinity Fincorp Solutions Fined ₹5.40 Lakh
RBI has imposed a penalty of ₹5.40 lakh on Infinity Fincorp Solutions Private Limited for violating certain provisions of the RBI’s Know Your Customer (KYC) Directions and Fair Practice Code.
The RBI conducted a statutory inspection of the company based on its financial position as of March 31, 2025. After reviewing the company’s response and hearing its submissions, RBI found that the company had failed to conduct periodic reviews of the risk classification of accounts at least once every six months.
The company also failed to clearly mention in its application forms and sanction letters how borrower risk was assessed and why different categories of borrowers were charged different interest rates.
Namdev Finvest Fined ₹2.70 Lakh
RBI has imposed a penalty of ₹2.70 lakh on Namdev Finvest Limited, formerly known as Namdev Finvest Private Limited, for non-compliance with certain KYC requirements.
The statutory inspection was conducted with reference to the company’s financial position as of March 31, 2025. After examining the company’s reply and submissions, RBI found that it had failed to maintain a strong software system for effectively identifying and reporting suspicious transactions.
Utsav Securities Fined ₹3.90 Lakh
RBI has imposed a penalty of ₹3.90 lakh on Utsav Securities Limited for violating directions related to governance and the submission of credit information to Credit Information Companies (CICs).
RBI found that the company’s Key Management Personnel (KMP) held office, including directorships, in other NBFCs-Middle Layer. The company also failed to submit credit information for certain loan accounts to the CICs.
The penalty was imposed under the Reserve Bank of India Act, 1934, and the Credit Information Companies (Regulation) Act, 2005.
Kedarnath Urban Co-operative Bank Fined ₹40,000
RBI has imposed a penalty of ₹40,000 on Kedarnath Urban Co-operative Bank Ltd., Latur, Maharashtra, for violating KYC requirements and certain operational instructions under the Supervisory Action Framework (SAF).
The RBI inspection was conducted based on the bank’s financial position as of March 31, 2025. RBI found that the bank had failed to upload customers’ KYC records to the Central KYC Records Registry (CKYCR) within the prescribed time.
The bank also offered higher interest rates on certain deposits than the rates offered by the State Bank of India, which was not in line with the applicable SAF directions.
RBI Clarifies About the Penalties
RBI said that the penalties are based on deficiencies in regulatory compliance. The action does not mean that RBI has declared any customer transaction or agreement with these institutions invalid.
RBI also clarified that imposing these monetary penalties does not prevent it from taking any other action against the concerned institutions if required.
