RBI imposes Monetary Penalty on Family Home Finance Private Limited

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.50,000 on Family Home Finance Private Limited, Mumbai, Maharashtra (the company) for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’.

This penalty has been imposed in the exercise of powers vested in RBI conferred under section 52A of the National Housing Bank Act, 1987.

The National Housing Bank conducted a statutory inspection of the company based on its financial situation as of March 31, 2022 and March 31, 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 why a penalty should not be imposed for its failure to comply with the aforementioned directions.

After analyzing the company’s response to the notice, oral comments made during the personal hearing, and examination of other submissions made by it, the RBI-determined, among other things, that the following charges against the company were supported and warranted the imposition of a monetary penalty.

The company had not:

• conducted risk categorisation of its customers;
• conducted a review of the risk categorisation of its customers; and
• conducted periodic updation of KYC of its customers.

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 imposition of this monetary penalty does not preclude the RBI from taking further action against the corporation.