RBI levies penalty on BoM, Hinduja Leyland Finance, Poonawalla Fincorp

The Reserve Bank on Friday said it has imposed a penalty of Rs 1.27 crore on Bank of Maharashtra (BoM) for violating its directions, including on Know Your Customer.

The Reserve Bank of India (RBI) has, by an order dated August 8, 2024, imposed a monetary penalty of Rs 1.27 crore on Bank of Maharashtra for non-compliance with certain directions issued by RBI on 'Loan System for Delivery of Bank Credit', 'Cyber Security Framework in Banks' and 'Know Your Customer', the central bank said in a statement.

After considering the bank's reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found that the charges against the bank were sustained, warranting imposition of monetary penalty.

Besides, the RBI has imposed a monetary penalty of Rs 4.90 lakh on Hinduja Leyland Finance Ltd for non-compliance with certain provisions of the Know Your Customer (KYC) Directions, 2016.

The action is based on a deficiency 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, it said in a separate statement.

The central bank has also imposed a monetary penalty of Rs 10 lakh on Poonawalla Fincorp Ltd for non-compliance with certain provisions of the 'Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016'.

After considering the company's reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found that the following charge against the company was sustained, warranting imposition of monetary penalty, RBI said in a statement.

The company charged interest on loans from dates prior to the disbursal of these loans, which was contrary to the terms and conditions of the loans communicated to the customers, it added.