RBI slaps penalty on IndusInd Bank, three NBFCs for regulatory lapses

The RBI imposed a Rs 59.20 lakh penalty on IndusInd Bank and also penalised Fusion Finance, Northern Arc Capital and Muthoot MCred for regulatory lapses

The Reserve Bank of India (RBI) on Friday imposed a Rs 59.20 lakh penalty on IndusInd Bank for non-compliance with certain provisions of directions on deposit rates and securitisation of standard assets. The regulator found that the bank had paid interest on deposits held in certain current accounts and had undertaken activities in the nature of ‘synthetic securitisation’.

 

Fusion Finance was penalised Rs 2.7 lakh for non-compliance with the RBI’s KYC Directions. The central bank found that the company failed to put in place a system for periodic review of the risk categorisation of accounts, with such reviews required to be conducted at least once every six months.

   

The regulator slapped a Rs 6.2 lakh penalty on Northern Arc Capital for lapses relating to disclosures in financial statements and the functioning of its Internal Ombudsman. The central bank found that the company did not disclose correct and complete information about customer complaints in its annual financial statements for 2024-25. It also failed to ensure auto-escalation of certain complaints that were partly or wholly rejected by its internal grievance redress mechanism to the Internal Ombudsman.

 

Muthoot MCred was fined Rs 3.1 lakh for non-compliance with RBI directions on asset classification. The regulator found that the company had upgraded certain loan accounts classified as non-performing assets (NPAs) to ‘standard’ without repayment of the entire arrears of interest and principal pertaining to all the credit facilities.

 

The statutory inspections of Northern Arc Capital, Fusion Finance and IndusInd Bank were conducted with reference to their financial position as of March 31, 2025.