The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 30 lakh on Bahadur Chand Investments, New Delhi, for non-compliance with certain provisions of the Core Investment Companies (Reserve Bank) Directions, 2016 and directions on Information Technology Framework for the NBFC sector.
This penalty has been imposed in exercise of powers vested in RBI under the provisions of the Reserve Bank of India Act, 1934, the central bank said in a statement on Friday.
The RBI stated that this action is based on regulatory compliance deficiencies and is not intended to rule on the validity of any transaction or agreement entered into by the company with its customers.
After conducting statutory inspection of the company, RBI revealed the company's failure to comply with the RBI directions on outsourcing, appointing an independent director/chief information officer (CIO)/chief technology officer (CTO) on IT strategy committee and disclosing components of adjusted net worth (ANW) and other related information in its annual financial statements for the position as on March 31, 2021.
The RBI's statutory inspection of the company was conducted with reference to Bahadur Chand's financial position as on March 31, 2021, and examination of the risk assessment report, inspection report, supervisory letter and all related correspondence pertaining to the same, according to the statement.
The value of the business as it appears on the company's books is estimated, and then unrealized capital gains, capital surplus, and voluntary reserves are added.
Further to that, the RBI reported that a notice was sent to the company directing it to demonstrate good cause as to why a fine should not be imposed on it for failing to follow the instructions set forth in the notice.
The central bank determined that the charge of failure to comply with the aforementioned RBI directions was substantiated and required the imposition of a monetary penalty after taking into account the company's response to the notice, reviewing additional submissions made by it, and listening to oral arguments made during the personal hearing.
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