RBI imposes monetary penalty on Anand Rathi Global Finance Limited Mumbai

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.20 lakh on Anand Rathi Global Finance Limited, Mumbai (the company), for non-compliance with certain provisions of the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016.

RBI conducted a statutory inspection of the company with reference to its financial position as of March 31, 2021, and examination of the Risk Assessment Report, Inspection Report, Supervisory Letter, and all related correspondence revealed, inter alia, that the company failed to carry out on-going due diligence of its customers, when it did not (i) undertake their risk categorisation and (ii) put in place any robust software for effective risk management. As a result, the company was served with a notice requiring it to show cause why a penalty should not be levied for failing to comply with the RBI’s orders, as specified therein.

After reviewing the company’s response to the notice and oral submissions made during the personal hearing, the RBI determined that the charge of non-compliance with the aforementioned RBI directions was proved and warranted imposition of monetary penalty.

This penalty was imposed in accordance with the requirements of clause (b) of sub-section (1) of section 58 G and clause (aa) of sub-section (5) of section 58 B of the Reserve Bank of India Act, 1934.

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