Reserve Bank of India Imposes Monetary Penalty on a Private Limited Company; Check Reason for the Same

The Reserve Bank of India (RBl) has imposed, by an order dated March 11, 2022, a monetary penalty of ₹2.50 lakh (Rupees Two Lakh and Fifty Thousand only) on M.L. Securities and Finance Private Limited, Indore (M.P) (the company) for noncompliance with certain provisions of the directions issued by RBI on classification of Non-performing assets contained in ‘Non-Banking Financial Company – Non Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016’. This penalty has been imposed in exercise of powers vested in RBI under the provisions of clause (b) of sub-section (1) of section 58 G read with clause (aa) of sub-section (5) of section 58B of the Reserve Bank of India Act, 1934, taking into account the failure of the company to adhere to the aforesaid directions issued by RBI.

This action is based on regulatory compliance inadequacies and is not intended to call into question the legitimacy of any transaction or agreement entered into by the company with its consumers.