RBI fines Mahindra Finance for non-compliance with regulations
Charged with a penalty of Rs.6.77 crores
RBI fines Mahindra Finance for non-compliance with regulations
Charged with a penalty of Rs.6.77 crores
The Reserve Bank of India (RBI) has imposed a monetary penalty on Mahindra Finance for non-compliance with its directions on fair practices. These relate to the disclosure of annualised rate of interest charged on loans to the borrowers at the time of sanction.
The penalty encompasses Mahindra Finance’s failure to give notice of change in terms and conditions of the loan to its borrowers, when it charged a higher rate of interest than what was communicated at the time of sanction, during financial years 2018-19, 2019-20 and 2020-21.
In the Bombay Stock Exchange (BSE) regulatory filing, Mahindra Finance stated, “In accordance with the captioned regulations and press release 2023-2024/31 issued by RBI dated April 6, 2023, this is to inform you that RBI, vide its order dated April 5, 2023, has imposed a monetary penalty of Rs.6.77 crore on the company in the exercise of powers conferred under clause (b) of sub-section (1) of section 58G read with clause (aa) of sub-section (5) of section 58B of the RBI Act, 1934.”
The company mentioned that it had already implemented the necessary steps for compliance with RBI’s directions. Also, it would take necessary steps to comply with the RBI said order.
The Mahindra Finance statement read, “The company has always endeavoured to maintain the highest standards of compliance and culture within the organization and shall continue to do so.