RBI imposes Monetary Penalty of Rs.20 Lakh on Dhani Loans and Services Limited

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.20 lakh on Dhani Loans and Services Limited (the company) for non-compliance with certain provisions of the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 (KYC directions), by an order dated September 14, 2023.

The Reserve Bank of India Act, 1934’s clauses (b) of sub-section (1) of Section 58G and (aa) of sub-section (5) of Section 58B give RBI the authority to impose penalties. As a result, this fine has been imposed.

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.

An investigation by RBI into the company’s compliance with the KYC directives revealed, among other things, that the company (i) failed to take live photographs of customers while conducting digital KYC, capturing a water-mark in readable form having CAF number, GPS coordinates, authorised official’s name, unique employee code (assigned by RE), and date-and-time stamp, and (ii) failed to take live photographs of customers while conducting digital KYC. As a result, a notice was sent to the company instructing it to provide justification as to why a penalty should not be levied against it for failing to follow the instructions provided in the RBI notice.

After considering the company’s reply to the notice and additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.