RBI imposes monetary penalty on Hinduja Leyland Finance Limited

Mumbai, 5 September: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 6.20 lakh (Rupees Six Lakh Twenty Thousand only) on Hinduja Leyland Finance Limited (the company) for non-compliance with certain provisions of the directions issued by RBI on ‘Pricing of Microfinance Loans’ and 'Securitization of Standard Assets.'

The penalty has been imposed in exercise of powers conferred on RBI under Section 58G(1)(b) read with Section 58B (5)(aa) of the Reserve Bank of India Act, 1934.

The statutory inspection of the company was conducted by RBI with reference to its financial position as of March 31, 2025. Based on the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why the penalty should not be imposed on it for its failure to comply with the said directions.

After considering the company’s reply to the notice, additional submissions made by it, and oral submissions made during the personal hearing, RBI found that the following charges against the company were sustained, warranting imposition of a monetary penalty:

The company failed to put in place a board-approved policy on the pricing of microfinance loans.

The company undertook activities in the nature of ‘synthetic securitization.'

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.