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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹4.90 lakh on ECL Finance Limited, Mumbai, for failing to comply with certain provisions of the RBI (Know Your Customer) Directions, 2016. The penalty was announced through an order dated December 4, 2023.
The action, taken under the powers vested in RBI under the Reserve Bank of India Act, 1934, follows deficiencies identified in regulatory compliance. The central bank clarified that the penalty is not related to the validity of any transactions or agreements between the company and its customers.
Background:
During a statutory inspection of ECL Finance Limited with reference to its financial position as on March 31, 2022, RBI observed that the company did not implement a robust software system for effective identification and reporting of suspicious transactions. Based on these findings, the company was served a show-cause notice.
After considering the company’s written and oral submissions during the personal hearing, RBI concluded that the non-compliance with KYC directions was substantiated, warranting the monetary penalty.
[RBI]