RBI imposes Monetary Penalty of Rs.28.30 lakh on SG Finserve Limited

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.28.30 lakh on SG Finserve Limited (formerly known as M/s Moongipa Securities Limited) (the company) for non-compliance with specific conditions under which the company was issued the Certificate of Registration (CoR) by RBI under section 45IA(5) of Reserve Bank of India Act, 1934 (RBI Act).

This penalty has been imposed in the exercise of powers conferred on RBI under the provisions of clause (a) of sub-section (1) of Section 58G read with sub-section (6) of Section 58 B of the RBI Act.

The company’s financial statements for the financial year 2022-23 indicated, among other things, non-compliance with the CoR’s specified conditions. Based on this, a notice was given to the company, asking it to show cause why a penalty should not be levied for failing to comply with the CoR’s provisions.

After reviewing the company’s response to the notice as well as oral submissions made during the personal hearing, the RBI determined among other things, that the following accusation against the company was supported and warranted the imposition of a monetary penalty.

The company had accepted public funds and extended loans in violation of the specific conditions of the CoR issued to it.

This action is based on shortcomings in regulatory compliance and is not intended to rule on the legitimacy of any transaction or agreement entered into by the company with its customers. Furthermore, the imposition of this monetary penalty does not preclude the RBI from taking further action against the corporation.