The Reserve Bank of India has imposed a monetary penalty of ₹8.10 lakh on Shri Ram Finance Corporation Private Limited for non-compliance with regulatory directions on governance and Know Your Customer norms.
The order imposing the penalty was dated August 19, 2026. RBI said the action was taken under powers available to it under section 58G(1)(b), read with section 58B(5)(aa), of the Reserve Bank of India Act, 1934.
Inspection and regulatory process
According to the RBI press release, the central bank had carried out a statutory inspection of the company with reference to its financial position as on March 31, 2025. The inspection led to supervisory findings on non-compliance with RBI directions.
Following the findings and related correspondence, 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 directions. The central bank said it considered the company’s reply, additional submissions and oral submissions made during a personal hearing before deciding on the penalty.
What RBI found
RBI said the charges sustained against the company related to governance and KYC requirements. The findings included lapses in prior approval for change in management and in customer risk categorisation.
- The company failed to take prior written permission from RBI while appointing a director, resulting in a change in management due to a change in more than 30 per cent of its directors, excluding independent directors.
- The company failed to put in place a system to categorise customers as low, medium and high risk.
- The company failed to upload KYC records of certain customers to the Central KYC Records Registry within the prescribed timeline.
The penalty is linked to non-compliance with certain provisions of directions issued by RBI on governance and the Reserve Bank of India (Know Your Customer) Directions.
Penalty does not rule on customer transactions
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.
The central bank also stated that the imposition of the monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.
The press release was issued by Brij Raj, Chief General Manager, and carried the press release number 2026-2027/943.
Source: Reserve Bank of India Press Releases.