New Delhi, Feb 14 (UNI) The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 5.80 lakh on Shriram Finance Limited for non-compliance with certain provisions of the RBI's 'KYC Directions, 2016’, ‘Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company Directions, 2016’ and directions on ‘Data Format for Furnishing of Credit Information to Credit Information Companies’ issued by RBI.

The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.

After considering the company’s reply to the notice, additional submissions made by it and oral

submissions made during the personal hearing, RBI found, inter alia, that the following charges against the company were sustained, warranting imposition of monetary penalty:

The company failed to put in place a system of periodic review of risk categorisation of accounts; The company did not ensure that its agreements with certain Direct Sales Agents had a clause regarding the RBI’s right to inspect books and accounts of service providers; and The company failed to share information about the Relationship Segment of the corporates to the Credit Information Companies, during the financial year 2022-23.

This action is based on 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.

Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.

UNI SKB CS1815