RBI imposes Monetary Penalty on M/s Pooram Finserv Pvt Limited

RBI imposes Monetary Penalty on M/s Pooram Finserv Pvt Limited The Reserve Bank of India (RBI) has, by an order dated February 04, 2022, imposed a monetary penalty of ₹10 lakh (Rupees ten lakh only) on M/s Pooram Finserv Pvt Limited, Thrissur, Kerala (the company) for non-adherence with certain provisions of the RBI Master Direction - Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 and RBI Direction on Raising Money Through Private Placement of Non-Convertible Debentures (NCDs) by NBFCs dated February 20, 2015. This penalty was imposed in exercise of RBI's powers under section 45JA and 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, taking into account the company's failure to comply with the aforementioned RBI directions. This action is based on regulatory compliance inadequacies and is not intended to call into question the legitimacy of any transaction or agreement entered into by the company with its consumers. Background The scrutiny of the operations of M/s Pooram Finserv Pvt Limited, Thrissur, Kerala was conducted in January 2019 and the Scrutiny Report, revealed, inter alia, noncompliance with above mentioned directions issued by RBI. In furtherance to the same, a notice was issued to the company advising it to show cause as to why penalty should not be imposed for failure to comply with the directions issued by RBI. After considering the company’s reply to the notice and examination of additional submissions made by it, RBI came to the conclusion that the charge of noncompliance with aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.