The Reserve Bank of India (RBI) has recently taken action against Bajaj Finance Limited, a prominent financial institution based in Pune, Maharashtra. The RBI issued an order on September 28, 2023, imposing a monetary penalty of ₹8.50 Lakh (Rupees Eight Lakh Fifty Thousand only) on the company for failing to comply with the ‘Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016’ issued by RBI. This penalty was imposed in accordance with the regulatory authority’s powers under the provisions of the Reserve Bank of India Act, 1934.
It’s essential to clarify that this action is related to regulatory compliance issues and is not a judgment on the validity of the company’s transactions or agreements with its customers.
Background
The RBI conducted a statutory inspection of Bajaj Finance with reference to its financial position as of March 31, 2022. This inspection included a review of the Risk Assessment Report and Inspection Report, as well as all related correspondence. The examination revealed several areas of non-compliance with RBI directives, primarily in the reporting of certain frauds to RBI and, in some cases, delayed reporting. Consequently, the RBI issued a notice to Bajaj Finance, requesting an explanation as to why a penalty should not be imposed for failing to adhere to the RBI’s directives.
Following a detailed review of the company’s response to the notice, additional submissions, and oral statements made during a Personal Hearing, the RBI concluded that the charges of non-compliance with the RBI directives were substantiated. As a result, they deemed it necessary to impose a monetary penalty for the extent of non-compliance with these directives.
In Shorts
Bajaj Finance, a prominent financial institution in Pune, Maharashtra, has been penalized by the Reserve Bank of India for non-compliance with RBI directives related to fraud monitoring. The penalty amounts to ₹8.50 Lakh and was imposed following a detailed inspection and review of the company’s compliance with these directives.
