11 December 2023
Reserve Bank of India (RBI) has imposed a penalty of Rs15.44 lakh on Berar Finance Ltd and ECL Finance Ltd, the non-banking financial company (NBFC) from Maharashtra, for violating various rules and regulations prescribed by the regulator.
Berar Finance and ECL Finance has been penalised Rs10.54 lakh and Rs4.90 lakh, respectively for non-compliance with provisions of RBI’s know your customer (KYC) directions.
The statutory inspection of Berar Finance, conducted by RBI with reference to its financial position as of 31 March 2022 and examination of the risk assessment report (RAR), inspection report (IR), supervisory letter and all related correspondence about the same revealed that the NBFC did not put in place a system of periodic review of risk categorisation of accounts and did not put in to use any robust software for effective identification and reporting of suspicious transactions.
ECL Finance was slapped with a fine of Rs4.90 lakh as it failed to use robust software for effective identification and reporting of suspicious transactions.
After considering the reply and oral submissions of all banks during the personal hearing, RBI concluded that non-compliance with its directions was substantiated and warranted the imposition of a monetary penalty.
RBI said the penalty is based on deficiencies in regulatory compliance and is not intended to be pronounced on the validity of any transaction or agreement they entered into with their customers.
Reserve Bank of India (RBI) has imposed a penalty of Rs15.44 lakh on Berar Finance Ltd and ECL Finance Ltd, the non-banking financial company (NBFC) from Maharashtra, for violating various rules and regulations prescribed by the regulator.
Berar Finance and ECL Finance has been penalised Rs10.54 lakh and Rs4.90 lakh, respectively for non-compliance with provisions of RBI’s know your customer (KYC) directions.
The statutory inspection of Berar Finance, conducted by RBI with reference to its financial position as of 31 March 2022 and examination of the risk assessment report (RAR), inspection report (IR), supervisory letter and all related correspondence about the same revealed that the NBFC did not put in place a system of periodic review of risk categorisation of accounts and did not put in to use any robust software for effective identification and reporting of suspicious transactions.
ECL Finance was slapped with a fine of Rs4.90 lakh as it failed to use robust software for effective identification and reporting of suspicious transactions.
After considering the reply and oral submissions of all banks during the personal hearing, RBI concluded that non-compliance with its directions was substantiated and warranted the imposition of a monetary penalty.
RBI said the penalty is based on deficiencies in regulatory compliance and is not intended to be pronounced on the validity of any transaction or agreement they entered into with their customers.
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