Penalty on Bridge Fintech Solutions Private Limited

The Reserve Bank of India (RBI) has, by an order dated March 04, 2025, imposed a monetary penalty of Rs.10.00 lakh on Bridge Fintech Solutions Private Limited (the company), also referred to as “Finzy,” for non-compliance with certain provisions of the ‘Non-Banking Financial Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017’ issued by RBI. This penalty has been imposed in the exercise of powers conferred on RBI under clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.

A scrutiny of the company was conducted by RBI in September 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why a penalty should not be imposed on it for its failure to comply with the said directions.

After considering the company’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the company were sustained, warranting the imposition of a monetary penalty.

The company:

i. disbursed loans to individual borrowers without the specific approval of individual lenders;

ii. took partial credit risk, which was not provided under the ‘Scope of Activities’ for NBFC-P2P companies;

iii. did not, in certain instances, (a) ensure that its agreements with service providers included clauses to recognise the right of RBI to cause an inspection to be made of the service providers, and (b) undertake an annual review of the service providers; and

iv. did not conduct periodic reviews of the compliance of the Fair Practices Code and functioning of the Grievances Redressal Mechanism.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, the imposition of this monetary penalty is without prejudice to any other action that may be initiated by the RBI against the company.

Penalty on Visionary Financepeer Private Limited

The Reserve Bank of India (RBI) has, by an order dated February 25, 2025, imposed a monetary penalty of Rs.16.60 lakh on Visionary Financepeer Private Limited (the company) for non-compliance with certain provisions of the ‘Non-Banking Financial Company—Peer to Peer Lending Platform (Reserve Bank) Directions, 2017’ issued by RBI. This penalty has been imposed in the exercise of powers conferred on RBI under clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.

A scrutiny of the company was conducted by RBI in September 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why a penalty should not be imposed on it for its failure to comply with the said directions.

After considering the company’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the company were sustained, warranting the imposition of a monetary penalty.

The company:

i. disbursed loans to individual borrowers without the specific approval of individual lenders, and it did not ensure that each individual lender and borrower had signed a loan agreement;

ii. did not disclose the required details of the borrowers to the lenders;

iii. did not have a Board-approved policy for pricing of services provided by it;

iv. did not, in certain instances, (a) ensure that its agreements with service providers included clauses to recognise the right of RBI to cause an inspection to be made of the service providers, and (b) undertake an annual review of the service providers; and

v. took partial credit risk, which was not provided under the ‘Scope of Activities’ for NBFC-P2P companies.

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 clients. Furthermore, the implementation of this monetary penalty does not preclude the RBI from taking further action against the company.

Penalty on Fairassets Technologies India Private Limited (‘Faircent’)

The Reserve Bank of India (RBI) has, by an order dated February 11, 2025, imposed a monetary penalty of Rs.40 lakh on Fairassets Technologies India Private Limited (the company) (also referred to as ‘Faircent’) for non-compliance with certain provisions of the ‘Non-Banking Financial Company—Peer to Peer Lending Platform (Reserve Bank) Directions, 2017’ issued by RBI. This penalty has been imposed in the exercise of powers conferred on RBI under the provisions of clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.

A scrutiny of the company was conducted by RBI in September 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why a penalty should not be imposed on it for its failure to comply with the said directions.

After considering the company’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the company were sustained, warranting the imposition of a monetary penalty.

The company:

i. disbursed loans without the specific approval of individual lenders;

ii. did not undertake and disclose credit assessment and risk profile of the borrowers to the prospective lenders;

iii. took partial credit risk by foregoing the management fee partially/fully, which was not provided under the ‘Scope of Activities’ for NBFC-P2P companies; and

iv. did not comply with RBI’s directions on ‘Fund Transfer Mechanism’, when it allowed repayments to lenders from fresh funds provided by new/existing lenders or through repayments pooled from the borrowers rather than from a specific borrower to a specific lender.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, the imposition of this monetary penalty is without prejudice to any other action that may be initiated by the RBI against the company.

Penalty on Rang De P2P Financial Services Limited (“Rang De”)

The Reserve Bank of India (RBI) has, by an order dated February 25, 2025, imposed a monetary penalty of Rs.10 lakh on Rang De P2P Financial Services Limited (the company) (also referred to as “Rang De”) for non-compliance with certain provisions of the ‘Non-Banking Financial Company—Peer to Peer Lending Platform (Reserve Bank) Directions, 2017’ issued by RBI. This penalty has been imposed in the exercise of powers conferred on RBI under the provisions of clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.

The RBI scrutinised the company in September 2023. Based on supervisory findings of noncompliance with RBI directions and accompanying correspondence, a notice was issued to the company urging it to show cause as to why a penalty should not be imposed for its failure to comply with the aforementioned directions.

After considering the firm’s reply to the notice, additional submissions made by it, and oral submissions made during the personal hearing, the RBI determined, among other things, that the following charge against the company was maintained and warranted the imposition of a monetary penalty:

The company made loans to individual borrowers without the approval of individual lenders.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, the imposition of this monetary penalty is without prejudice to any other action that may be initiated by the RBI against the company.