The Reserve Bank of India (RBI) has levied monetary penalties on two non-banking financial companies (NBFCs)—Shri Ram Finance Corporation Private Limited and Progfin Private Limited—for violating statutory governance directives and Know Your Customer (KYC) norms.
The penalties follow statutory inspections conducted by the central bank with reference to the financial positions of both companies as of March 31, 2025.
Breakdown of Regulatory Violations & Penalties
| Entity | Penalty Amount | Key Lapses & Grounds for Action |
| Shri Ram Finance Corporation Pvt. Ltd. | ₹8.10 Lakh |
• Management Governance: Appointed a director without prior written permission from the RBI, resulting in a change of management exceeding 30% of total directors (excluding independent directors). • Customer Risk Categorization: Failed to establish a system to classify customers into low, medium, and high-risk categories. • CKYCR Reporting Lapses: Failed to upload customer KYC records to the Central KYC Records Registry within mandated timelines. |
| Progfin Pvt. Ltd. | ₹2.70 Lakh | • Periodic Risk Review: Failed to implement a system for conducting mandatory periodic reviews of account risk categorizations at least once every six months. |
Key Takeaways
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Regulatory Focus: The central bank’s actions underscore heightened supervisory scrutiny over governance practices, board-level management changes, and anti-money laundering (AML/KYC) frameworks within NBFCs.
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Customer Transaction Safety: The RBI clarified that the penalties are strictly based on deficiencies in regulatory compliance and do not invalidate any existing contracts or individual transactions entered into by either firm with its customers.
