The Reserve Bank of India in action:
The Reserve Bank of India (RBI) announced on Friday that it has imposed a monetary penalty of Rs 1,50,000 on Sundaram Home Finance and Rs 3,10,000 on Belstar Microfinance due to their non-compliance with certain provisions of the 2016 Know Your Customer (KYC) directive. According to the central bank, Sundaram Home Finance neglected to conduct periodic updates of KYC for specific customers within the designated time frame.
On the other hand, Belstar Microfinance delegated decision-making responsibilities regarding compliance with KYC norms to external agents. Notices were issued to both companies, prompting them to provide justifications as to why penalties should not be imposed for their failure to adhere to the specified directives.
Following a thorough examination of the companies’ responses to the notices, oral arguments presented during personal hearings, and additional submissions, the RBI concluded that the allegations against the companies were substantiated, warranting the imposition of monetary penalties.
