Reserve Bank of India has imposed penalty A penalty of Rs 6.77 crore has been imposed on Mahindra & Mahindra Financial Services Ltd, Mumbai for not disclosing interest rates to borrowers while sanctioning loans, a central bank release said on Thursday. Indian Bank fined Rs. A fine of Rs 55 lakh was imposed by the central bank for violation of certain norms of Know Your Customer (KYC).
reserve Bank of India Muthoot Money Limited, Ernakulam has also been fined 10.50 lakh for non-adherence to the provisions relating to ‘Monitoring of Frauds’ in the NBFCs (Reserve Bank) Guidelines, 2016.
The central bank clarified in the release that the penalty was imposed for deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement between the concerned financial institutions and their customers.
The statutory inspection was carried out against Mahindra & Mahindra Financial Services with reference to its financial position as on March 31, 2019 and March 31, 2020.
The Reserve Bank of India (RBI) said that it had discovered instances of the company violating norms regarding transparent practices for loans. Notably, the company failed to disclose the annual interest rates charged from the borrowers at the time of lending and also did not inform the borrowers about the changes made in the terms and conditions of their loans.
For Indian Bank, the central bank took up the investigation on the basis of high value frauds reported by the bank.
Read more: What could be the reason for RBI’s early pause in repo rate when inflation is still high?
(With inputs from PTI)
catch all business News, market news, today’s fresh news events and Breaking News Update on Live Mint. download mint news app To get daily market updates.