The Reserve Bank of India (RBI) on Friday (February 14) said it has imposed a monetary penalty of ₹5.80 lakh on Shriram Finance Ltd for non-compliance with key regulatory provisions, including the RBI’s Know Your Customer (KYC) guidelines and credit information reporting norms.
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According to the RBI, Shriram Finance failed to establish a system for periodic risk categorisation of accounts, did not include mandatory clauses in agreements with certain direct sales agents regarding RBI’s inspection rights, and did not furnish required corporate relationship data to credit information companies for the financial year 2022-23.
“The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of noncompliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions,” the RBI said.
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Following a supervisory review and company representations, the central bank concluded that these lapses warranted a monetary penalty. It clarified that the penalty was imposed due to regulatory deficiencies and did not impact the validity of the company’s transactions with customers.
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company,” RBI added.
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Shares of Shriram Finance Ltd ended at ₹539.05, down by ₹9.20, or 1.68%, on the BSE.
First Published: Feb 14, 2025 6:26 PM IS
