Document title: RBI imposes monetary penalty on Shri Ram Finance Corporation Private Limited
Issuing authority: Reserve Bank of India
Reference number: Press Release: 2026-2027/943
Date: 21 August 2026 (order dated 19 August 2026)
Regulatory and Policy Measures
The Reserve Bank of India, exercising powers under section 58G(1)(b) read with section 58B(5)(aa) of the RBI Act, 1934, imposed a monetary penalty of ₹8.10 lakh on Shri Ram Finance Corporation Private Limited. The penalty stems from non‑compliance with RBI’s Governance Directions and Know Your Customer (KYC) Directions.
A statutory inspection was conducted with reference to the company’s financial position as on 31 March 2025. Following the inspection, RBI issued a notice seeking the company’s explanation for the alleged breaches. After evaluating the company’s written reply, additional submissions, and oral arguments presented during a personal hearing, RBI sustained three specific charges: (i) the company appointed a director without obtaining prior written permission from RBI despite a change of more than 30 % of its directors (excluding independent directors); (ii) it failed to establish a system to categorise customers into low, medium, and high‑risk categories; and (iii) it did not upload KYC records of certain customers to the Central KYC Records Registry within the prescribed timeline.
The penalty is imposed without prejudice to any further action RBI may initiate against the company.
In conclusion, the RBI’s enforcement action underscores its commitment to strict adherence to governance and KYC norms by non‑banking financial entities, with a monetary sanction of ₹8.10 lakh levied on Shri Ram Finance Corporation Private Limited.