RBI Imposes Rs1.42 Crore Penalty on Bank of Maharashtra, Poonawala Fincorp and Hinduja Leyland Finance

Moneylife Digital Team 19 August 2024

Investor Interest

Reserve Bank of India (RBI) has imposed penalties of Rs1.42 crore Bank of Maharashtra (BoM) and two non-banking financial companies (NBFCs), namely, Poonawalla Fincorp Ltd and Hinduja Leyland Finance Ltd, for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs1.27 crore has been imposed on Bank of Maharashtra.

Bank of Maharashtra has been penalised for non-compliance with certain directions issued by RBI on the loan system for delivery of bank credit, the cyber security framework in banks, and know-your-customer (KYC).

RBI's statutory inspection revealed several issues with the BoM, including ensuring that the minimum outstanding loan component was at least the specified percentage of the sanctioned borrower's fund-based working capital limit. It also failed to implement a fraud risk management system across all delivery channels. Additionally, the Bank assigned multiple customer identification codes to some customers instead of providing each customer with a unique code (UCIC). BoM also allowed operations in certain small accounts that did not meet regulatory requirements, RBI says.

Maharashtra-based Poonawalla Fincorp was penalised Rs10 lakh for non-compliance with provisions of the NBFC regulations. RBI found out that Poonawalla Fincorp charged interest on loans from the dates before the dates of disbursal of these loans, which was contrary to the terms and conditions of the loans communicated to the customers.

Hinduja Leyland Finance was penalised Rs4.90 lakh for non-compliance with provisions of RBI KYC directions. RBI found that Hinduja Leyland Finance did not put robust software into use to throw alerts when the transactions were inconsistent with risk categorisation and updated customer profiles as part of the adequate identification and reporting of suspicious transactions.

In all three cases, RBI said penalties are based on deficiencies in regulatory compliance and are not intended to pronounce on the validity of any transaction or agreement they entered into with their customers.

Comments

User

dhiru.dk1993

9 months ago

Sir,
I am Dharmendra Kumar, my loan number is BHAAKITW00176. I pay EMI on 28th of every month but this month on 27/09/2024 at around 9:00 AM, Shivam Kumar along with 3 other boys came to my house in a 4 wheeler (Swift car) as bouncers and abused me and also beat my elder brother due to which he got completely injured. Sir, their fault was that they said that the EMI will be paid by today evening or tomorrow morning i.e. by 28/09/2024. But those people did not listen to a single word of his. Everyone together beat him alone on the road.
Therefore, behaving like this is a serious crime by the employees of Hinduja Leyland Finance. Therefore, action should be taken against the crime committed by Shivam Kumar.
Whenever a customer asks for an online login ID and password or asks about any application, these people do not provide anything to the customer, they always do as they please