New Delhi: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2.70 lakh on Northern Arc Capital Limited for non-compliance with certain provisions of the ‘Reserve Bank of India [Know Your Customer (KYC)] Directions’ issued by RBI.
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 on March 31, 2024.
A notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said direction based on the findings of non-compliance with RBI directions.
Additional submissions were made by the company and oral submissions made during the personal hearing, and with that RBI found, that the following charge against the company was sustained, warranting imposition of monetary penalty:
The company failed to put in place any IT system / software for effective identification and reporting of suspicious transactions.
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.
Northern Arc Capital Limited (previously known as IFMR Capital Finance Limited) is a Non-Banking Finance Company incorporated in 2008 that provides access to debt for under-banked individuals and businesses in India.