Mumbai: The Reserve Bank of India (RBI) has charged a fine of Rs 55 lakh on Indian Bank for non-compliance with certain provisions of the Reserve Bank of India (Know Your Customer) Directions, 2016. RBI has also imposed a fine of ₹6.77 crore on Mahindra & Mahindra Financial Services Ltd, Mumbai for not disclosing interest rates to borrowers at the time of sanctioning loans.
A statutory inspection of the NBFC revealed that Mahindra & Mahindra charged a higher rate of interest than what was communicated at the time of loan sanction during financial years (FY)18-19, FY19-20, and FY20-21 and failed to give notice of change in terms and conditions of the loan to its borrowers.
RBI said, “After considering the reply of the two non-banking finance companies (NBFCs) and Indian Bank to the notices, submissions made during the personal hearing, and additional information furnished pursuant to the personal hearing, RBI came to the conclusion that the charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty.”
Ernakulam-based Muthoot Money Ltd was found violating certain provisions of RBI directions on monitoring fraud in NBFCs. The statutory inspection of the company was conducted by RBI, which discovered the non-compliance by the NBFC with the RBI directions to the extent it reported certain frauds to RBI with delay. After the hearing of submissions and perusal of necessary documents, the apex bank imposed a penalty of Rs10.50 lakh.
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