The Reserve Bank of India (RBI) has imposed monetary fines on three non-banking financial companies (NBFCs) for regulatory lapses and non-compliance with various RBI directions. The fines, issued between September 3 and September 11, 2024, have been imposed on Hewlett Packard Financial Services (India) Private Limited, SMFG India Credit Company Limited and Muthoot Vehicle and Asset Finance Limited, an RBI notification said on Friday.
On September 3, 2024, RBI imposed a fine of ₹10,40,000 on Hewlett Packard Financial Services (India) Private Limited. This action was taken by RBI following an inspection of the company based on its financial position as on March 31, 2022. The penalty was imposed for non-compliance with the ‘Know Your Customer (KYC)’ guidelines and other directions applicable to systemically important non-deposit-taking NBFCs.
RBI said, “This penalty has been imposed in exercise of powers conferred on RBI under the provisions of clause (b) of subsection (1) of section 58G of the Reserve Bank of India Act, 1934 read with clause (aa) of subsection (5) of section 58B.” On September 4, 2024, SMFG India Credit Company Limited (earlier known as Fullerton India Credit Company Limited) was fined ₹23,10,000 for violating RBI’s information technology (IT) and cyber security guidelines. According to RBI, during a control gap assessment in April 2023, it found that the company failed to include provisions for monitoring and inspections in its contracts with outsourced vendors, neglected to conduct IS audits for network and security systems, and did not maintain critical audit logs.
RBI said, “The Reserve Bank of India (RBI) vide order dated September 4, 2024 has imposed a monetary penalty of ₹23,10,000/- (Rupees Twenty Three Lakh Ten Thousand only) on SMFG India Credit Company Limited (formerly known as Fullerton India Credit Company Limited) (company) for non-compliance of certain provisions of the RBI Act.” On September 11, 2024, Muthoot Vehicle and Asset Finance Limited was fined ₹7,90,000 for non-compliance of RBI’s Liquidity Risk Management Framework and other relevant guidelines.
Company failed to disclose LCR
According to RBI, the statutory inspection revealed that the company failed to disclose its liquidity coverage ratio (LCR) on its website, did not submit customer data to credit information companies, and failed to issue loan sanction letters in vernacular language to vehicle loan borrowers.
