RBI Imposed Monetary Penalty on Swagatam Marketing Private Limited

RBI Imposed Monetary Penalty on Swagatam Marketing Private Limited The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.1.00 lakh (Rupees one lakh only) on M/s Swagatam Marketing Private Limited, Kolkata (the company) for contravention of/ non-compliance with the directions issued by RBI to Non-Banking Financial Company (Non-Systemically Important, Non-Deposit taking) regarding Change in Management by an order dated August 16, 2022. This fine has been imposed in retaliation for the company's failure to follow the aforementioned instructions given by 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. This action is based on regulatory compliance shortcomings and is not meant to rule on the legality of any transaction or arrangement the company has with its clients.

Background

A reference regarding M/s Swagatam Marketing Private Limited, a non-systemically important and non-deposit taking non-banking financial company, was received from the Department of Supervision in Kolkata. The reference indicated that the company had changed its management without the prior approval of the Reserve Bank of India, contravening the current RBI guidelines. Based on this, a notice was sent to the company asking it to provide justification for not imposing a fine for failing to follow the instructions. After considering the company’s reply and oral submissions made by it during Personal Hearing, RBI came to the conclusion that the aforementioned charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.