The Reserve Bank of India (RBI) on Friday imposed a monetary penalty of 5 lakh each on KKR India Financial Services and Daimler Financial Services India for non-compliance.
is with non-compliance reserve Bank of IndiaGuidelines for ‘Monitoring of Frauds in Non-Banking Financial Companies (Reserve Bank) Directions, 2016’
In a statement, RBI said, “This action is based on deficiencies in regulatory compliance and is not intended to impinge on the validity of any transaction or agreement entered into by the company with its customers.”
The penalty comes after a statutory inspection that the RBI conducted both the companies with regard to their financial position as on March 31, 2020, and scrutinized the risk assessment reports, inspection reports, and all related correspondence regarding the same.
During inspection, RBI detected both the companies for non-compliance of the above directions for delay in reporting the fraud to RBI through FMR-1.
Subsequently, the RBI sent a notice to these companies advising them to show cause as to why the penalty should not be imposed for failure to comply with the RBI directions, as stated therein.
“After considering the company’s reply to the notice, the oral submissions made in the personal hearing, and examination of the additional submissions made by it, RBI came to the conclusion that the allegation of non-compliance of the above directions of RBI was substantiated. and it was necessary to implement monetary penalty,” the central bank said for both the companies.