RBI penalized BoM, Hinduja Leyland Finance and Poonawalla Fincorp for violating KYC norms

The Reserve Bank of India has announced that it penalized BoM, Hinduja Leyland Finance and Poonawalla Fincorp for violating KYC norms.

RBI said that it has imposed a penalty of Rs 1.27 crore on the Bank of Maharashtra (BoM) for violating its instructions, including Know Your Customer.

The Reserve Bank of India (RBI) imposed a monetary penalty of Rs.1.27 crore on the Bank of Maharashtra on August 8, 2024, for non-compliance with certain RBI directions on ‘Loan System for Delivery of Bank Credit’, ‘Cyber Security Framework in Banks’, and ‘Know Your Customer’, according to a statement.

After reviewing the bank’s response to the notice, oral representations made during the personal hearing, and assessment of additional submissions made by it, the RBI determined that the accusations against the bank were maintained, necessitating the imposition of a monetary penalty.

Furthermore, the RBI has levied a monetary penalty of Rs.4.90 lakh on Hinduja Leyland Finance Ltd for failing to comply with certain terms of the Know Your Customer (KYC) Directions, 2016.

The action is based on a failure to comply with regulatory requirements and is not intended to rule on the legitimacy of any transaction or agreement entered into by the company with its clients, according to a separate statement.

Poonawalla Fincorp Ltd has also been fined Rs.10 lakh by the central bank for failing to comply with certain terms of the ‘Non-Banking Financial Company – Systemically Important Non-Deposit Taking Company and Deposit Taking Company (Reserve Bank) Directions, 2016’.

After reviewing the firm’s response to the notice, oral representations made during the personal hearing, and other submissions made by it, the RBI determined that the following accusation against the company was maintained, warranting the imposition of a monetary penalty, according to a statement.

The company charged interest on loans from dates prior to their disbursement, which contradicted the loan terms and conditions disclosed to customers, it noted.