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The Reserve Bank of India (RBI) on Wednesday imposed a monetary penalty on Mahindra Finance for non-compliance under the RBI directions on fair practices relating to disclosure of annualised rate of interest charged on loans to the borrowers at the time of sanction.
The Rs 6.77 crore penalty also encompassed Mahindra Finance’s failure to give notice of change in terms and conditions of loan to its borrowers, when it charged higher rate of interest than what was communicated at the time of sanction, during financial years 2018-19, 2019-20 and 2020-21..
“In accordance with the captioned regulations and press release 2023-2024/31 issued by the Reserve Bank of India (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 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,” said Mahindra Finance in a BSE regulatory filing.
The company mentioned that it has already implemented necessary steps for compliance with the RBI directions. Additionally, Mahindra Finance also said it will be taking necessary steps to comply with the said order from RBI.
“The Company has always endeavored to maintain the highest standards of Compliance and Culture within the organization and shall continue to do so,” it said.
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