The non-compliance is with RBI's guidelines of ‘Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016’
In a statement, RBI said, "This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers."
The penalty comes after a statutory inspection that the RBI conducted of both the companies concerning their financial position as of March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report, and all related correspondence about the same.
During the inspection, RBI found out both the companies of non-compliance with the aforesaid Directions to the extent delay in reporting fraud to RBI through FMR-1.
Following this, RBI sent a notice to these companies advising them to show cause as to why the penalty should not be imposed on the failure to comply with the RBI directions, as stated therein.
"After considering the company’s reply to the notice, oral submissions made in the personal hearing, and examination of additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty," the central bank said for both the companies.
