RBI imposes penalty on Sundaram Home Finance, Belstar Microfinance

The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 1,50,000 on Sundaram Home Finance and Rs 3,10,000 on Belstar Microfinance for failing to comply with specific provisions of the Know Your Customer (KYC) directive, 2016, the central bank said on Friday.

The RBI stated that Sundaram Home Finance failed to conduct periodic updates of KYC for certain customers within the prescribed time frame. Meanwhile, Belstar Microfinance outsourced decision-making functions of determining compliance with KYC norms to certain outsourced agents.

Notices were issued to the companies, asking them to justify why a penalty should not be imposed for their failure to comply with the specified directions.

After reviewing the companies’ responses to the notice, oral arguments presented during the personal hearing, and an examination of additional submissions, the RBI determined that the charges against the companies were substantiated, justifying the imposition of monetary penalties.