The Reserve Bank of India has imposed a monetary penalty of ₹5.40 lakh on Infinity Fincorp Solutions Private Limited for non-compliance with certain regulatory directions. The penalty order was dated August 03, 2026, and the RBI issued the press release on August 07, 2026.
The central bank said the action relates to provisions of the Reserve Bank of India (Know Your Customer (KYC)) Directions and directions issued by the RBI on the Fair Practice Code. The penalty was imposed under section 58(G)(1)(b) read with section 58(B)(5)(aa) of the Reserve Bank of India Act, 1934.
The release identifies the penalty as a regulatory compliance action. It does not describe the penalty as a finding on the company’s financial soundness, and it does not announce any operational restriction on the company.
Inspection and show-cause process
According to the RBI, it conducted a statutory inspection of Infinity Fincorp Solutions with reference to the company’s financial position as on March 31, 2025. The inspection led to supervisory findings, after which the RBI considered related correspondence with the company.
Based on those findings, the RBI issued a notice to the company asking it to show cause why a penalty should not be imposed for failure to comply with the applicable directions. A show-cause notice is the stage at which the regulated entity is asked to respond to the alleged compliance lapses before the regulator takes a final view.
The RBI said it considered the company’s reply to the notice and the oral submissions made during a personal hearing. After this process, the central bank concluded that two charges of non-compliance were sustained and warranted imposition of a monetary penalty.
Why the penalty was imposed
The first sustained charge concerned KYC compliance. The RBI said the company had failed to put in place a system for periodic review of risk categorisation of accounts. The required periodicity for such review was at least once in six months.
Risk categorisation of accounts is part of the customer due diligence framework referred to in the RBI’s KYC directions. The press release specifically notes that the deficiency was not about a single account but about the absence of a system for periodic review at the required interval.
The second sustained charge concerned Fair Practice Code-related disclosures. The RBI said the company had failed to disclose the approach for gradation of risk and the rationale for charging different rates of interest to different categories of borrowers in application forms and sanction letters.
This finding relates to what borrowers are told at the application and sanction stages. As described in the release, the compliance issue was that the company did not disclose how it graded risk and why different borrower categories could be charged different interest rates.
- The company failed to put in place a system for periodic review of risk categorisation of accounts, with the review required at least once in six months.
- The company failed to disclose the approach for gradation of risk and the rationale for charging different rates of interest to different categories of borrowers in application forms and sanction letters.
RBI’s clarification
The RBI clarified that the action is based on deficiencies in regulatory compliance. It said the penalty is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers.
This means the order, as described by the RBI, is not a decision on whether customer agreements or individual transactions are valid or invalid. It is a penalty for failure to comply with the specified regulatory directions.
The central bank also stated that the monetary penalty is without prejudice to any other action that may be initiated against the company. The phrase means the penalty does not prevent the RBI from taking any other action, if warranted under applicable law or regulation.
Details from the release
The press release was issued by Brij Raj, Chief General Manager, under Press Release number 2026-2027/841. The RBI did not state any further operational restriction, customer compensation direction, or customer-facing measure in the release.
The key facts in the RBI release are the penalty amount of ₹5.40 lakh, the order date of August 03, 2026, the release date of August 07, 2026, the statutory inspection reference date of March 31, 2025, and the two sustained compliance findings relating to KYC review systems and Fair Practice Code disclosures.
Source: Reserve Bank of India Press Releases.