In a recent move, the Reserve Bank of India (RBI) on Friday (August 16) imposed a monetary penalties on three financial institutions for various lapses. The three financial institutions include Bank of Maharashtra, Hinduja Leyland Finance, and Poonawalla Fincorp. The RBI imposed penalties on these institutions for the following reasons:
Bank of Maharashtra
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The Bank of Maharashtra was slapped with a penalty of Rs 1.27 crore for failing to meet RBI's guidelines related to the ‘Loan System for Delivery of Bank Credit’, ‘Cyber Security Framework in Banks’, and ‘Know Your Customer’ (KYC) rules.
This fine was imposed by an order dated August 8, 2024,
Hinduja Leyland Finance
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The RBI’s inspection of Hinduja Leyland Finance Limited, focused on its financial health as of March 31, 2022, revealed a gap in risk management.
The company failed to deploy software to flag suspicious transactions, a critical aspect of KYC compliance. As a result, a penalty of Rs 4.90 lakh was imposed.
Poonawalla Fincorp
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Poonawalla Fincorp Limited faced a Rs 10 lakh fine by an order dated August 12, 2024, for violating RBI’s Fair Practices Code for Non-Banking Financial Companies (NBFCs).
The company was found to be charging interest on loans even before the actual disbursement dates.
Shares Performance of the companies
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The shares of Bank of Maharashtra on Friday ended the week on a positive note. The shares of the company went up by 1.16 per cent, closing at Rs 61.25 apiece.
Hinduja Leyland Finance shares closed at Rs 362.50 per share, ending the day up by 2.30 per cent.
