RBI imposed Monetary Penalty on Mahindra & Mahindra; Check Details:

RBI imposed Monetary Penalty on Mahindra & Mahindra; Check Details The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.6.77 crore (Rupees Six crore seventy seven lakh only) on Mahindra & Mahindra Financial Services Limited, Mumbai (the company) for non-compliance with the "Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016” issued by RBI, by an order dated April 5, 2023. 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 58 B of the Reserve Bank of India Act, 1934. This action is based on the 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. The RBI performed a statutory inspection of the company based on its financial situation as of March 31, 2019 and March 31, 2020. An examination of the Risk Assessment Report, Inspection Reports, and all related correspondence revealed, among other things, non-compliance by the company with RBI directions on fair practises relating to disclosure of annualised rate of interest charged on loans to borrowers at the time of sanction and failure to give notice of change in terms and conditions of loan to its borrowers, when it charged higher rate of interest than what was communicated. In addition, a notice was issued to the business advising it to show cause why a penalty should not be imposed on it for failing to comply with the RBI directions, as mentioned in the notice. After reviewing the company's response to the notice, oral submissions made during the personal hearing, and additional submissions made by it, the RBI concluded that the charge of non-compliance with the aforementioned RBI directions was substantiated and warranted imposition of monetary penalty.