The Reserve Bank of India (RBI) has imposed monetary penalties on three financial companies for non-compliance with its regulatory directions.
₹2.70 Lakh Penalty on Fusion Finance
RBI has imposed a monetary penalty of ₹2.70 lakh on Fusion Finance Limited for failing to comply with certain provisions of the RBI’s Know Your Customer (KYC) Directions.
During its inspection, RBI found that the company had not put in place a system for periodic review of the risk categorisation of accounts. As per the applicable requirement, such reviews should be carried out at least once every six months.
RBI issued a show-cause notice to the company after identifying the regulatory non-compliance. After considering the company’s reply and its submissions during the personal hearing, RBI concluded that the charge was sustained and imposed the penalty.
₹3.10 Lakh Penalty on Muthoot MCred
RBI has also imposed a monetary penalty of ₹3.10 lakh on Muthoot MCred Limited, formerly known as Muthoottu Mini Financiers Limited. The penalty relates to non-compliance with RBI directions on Asset Classification.
The inspection found that the company had upgraded certain loan accounts from Non-Performing Assets (NPAs) to Standard accounts without receiving full repayment of the outstanding interest and principal arrears relating to all the credit facilities.
After considering the company’s reply, additional submissions and oral submissions made during the personal hearing, RBI found the charge to be established and imposed the monetary penalty.
₹6.20 Lakh Penalty on Northern Arc Capital
Northern Arc Capital Limited has been fined ₹6.20 lakh by RBI for non-compliance with directions relating to Disclosures in Financial Statements – Notes to Accounts and Internal Ombudsman for Regulated Entities.
RBI found two regulatory deficiencies in the company’s operations. First, the company did not provide correct and complete information about customer complaints in its Annual Financial Statements for the financial year 2024-25.
Second, the company failed to ensure the automatic escalation of certain complaints to its Internal Ombudsman when those complaints were partly or completely rejected by its Internal Grievance Redress Mechanism.
