NEW DELHI: The Reserve Bank of India (RBI) has imposed a fine worth Rs 46.7 lakhs on three firms for non compliance with certain provisions of directives issued by the Reserve Bank of India. In three separate press releases issued by the apex bank on 21 February, it issued a monetary penalty on CitiBank NA, JM Financial and Asirwad Microfinance.
CitiBank NA
The Reserve Bank of India (RBI) has imposed a Rs 39 lakh penalty on Citibank NA for non-compliance with its guidelines on the large exposures framework and furnishing of credit information to credit information companies (CICs).
The penalty follows RBI’s inspection of the bank’s financial position as of March 31, 2023, which revealed regulatory breaches, including:
- Delayed reporting of breaches in Large Exposures limits.
- Failure to upload rectified data within seven days after receiving rejection reports from CICs.
JM Financial
JM Financial Home Loans Limited is facing a Rs 1.50 lakh penalty for non-compliance with the non-banking financial company – housing finance company (Reserve Bank) directions, 2021.
Following an inspection of the company’s financial position as of March 31, 2022, and March 31, 2023, RBI found that the company failed to disclose its risk gradation approach and rationale for different interest rates in application forms and sanction letters.
Asirwad Microfinance
The Reserve Bank of India (RBI) imposed a Rs 6.20 lakh penalty on Asirvad Micro Finance Limited for non-compliance with the regulatory framework for microfinance loans, 2022, and guidelines on appointment of internal Ombudsman by NBFCs.
Following an inspection of the company’s financial position as of March 31, 2023, RBI found that the company:
- Failed to report household income of certain borrowers to Credit Information Companies.
- Did not provide factsheets to some gold loan customers.
- Lacked a system for auto-escalation of rejected complaints to the internal Ombudsman.
The release further added that the penalty is based on regulatory deficiencies and does not affect the validity of transactions or agreements with customers. RBI may take further action if necessary.
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