The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs. 2.70 lakh (Rupees Two Lakh Seventy Thousand only) on Shriram Finance Limited for non-compliance with certain provisions of the Reserve Bank of India (Digital Lending) Directions, 2025 issued by RBI. The Shriram Finance company routed the loan repayments through the account of a third-party, instead of the borrowers directly crediting the loan repayments to the company’s account. Hence RBI has imposed a fine of Rs 2.70 lakh on the company.
 |
| RBI Imposes Rs 2.7 lakh Penalty on Shriram Finance |
RBI Imposes ₹2.7 lakh Penalty on Shriram Finance
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2.70 lakh on Shriram Finance Limited for non-compliance with certain provisions of the Reserve Bank of India (Digital Lending) Directions, 2025 issued by RBI.
Read Also: RBI Imposes Rs 15 lakh Penalty on Solapur Janata Sahakari Bank
This penalty has been imposed in exercise of powers conferred on RBI under clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.
Apart from this, the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹4.88 lakh on HDFC Bank in exercise of powers vested in the Reserve Bank under the provisions of Section 11(3) of FEMA, 1999, for contravention of Paragraph 9.3.6 of ‘Master Direction – Foreign Investment in India’ dated January 04, 2018, while granting a term loan to its client.
What is Reserve Bank of India (Digital Lending) Directions, 2025?
The Reserve Bank of India (RBI) issued the “Reserve Bank of India (Digital Lending) Directions, 2025” on May 8, 2025, with the main objective of enhancing transparency, customer protection, and regulatory oversight in the digital lending ecosystem.
These directions consolidate and replace previous guidelines, including those on digital lending and default loss guarantee (DLG). The new Reserve Bank of India (Digital Lending) Directions, 2025 framework aims to address issues such as mis-selling, data privacy violations, unfair business practices, and unethical recovery methods.
RBI Imposes Penalty on Shriram Finance: Background
The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2024.
RBI found, inter alia, that the following charge against the company was sustained, warranting imposition of monetary penalty:
- The Shriram Finance company routed the loan repayments through the account of a third-party, instead of the borrowers directly crediting the loan repayments to the company’s account. Hence RBI has imposed a fine of Rs 2.70 lakh on the NBFC company.
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.
About Shriram Finance
Shriram Finance is the country’s one of the biggest retail NBFC offering credit solutions for commercial vehicles, two-wheeler loans, car loans, home loans, gold loans, personal and small business loans.
Shriram is a pioneer in the NBFC Industry with a strong rural presence. The Shriram Finance Limited is one of India's leading NBFCs, with 9.56 Million (as on March 31, 2025) private and corporate customers across India.
Vision of Shriram Finance
The vision of Shriram Finance to be the country's most-preferred financial services destination, delivering delightful customer experience through empowered employees.
Reserve Bank of India (RBI)
The Reserve Bank of India was established on April 1, 1935 according to the provisions of the Reserve Bank of India Act, 1934. The headquarters of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937.
Read Also: RBI signs Currency Swap Agreement with Maldives Monetary Authority
Initially the bank was privately owned, but since nationalization in 1949 it is fully owned by the Government of India.
Governor of RBI
The current Governor of the Reserve Bank of India is Sanjay Malhotra. He replaced Shaktikanta Das as the governor.
Deputy Governor of RBI
The 4 Deputy Governors are appointed in the Reserve Bank of India (RBI), who are as follows.
- M. Rajeshwar Rao
- T. Rabi Sankar
- Swaminathan J
- Dr Poonam Gupta
Read Also: RBI appoints Aviral Jain as new Executive Director
Static Current Affairs related to RBI for upcoming exams
- Establishment: 1 April 1935
- Headquarters: Mumbai, Maharashtra
- Governor: Sanjay Malhotra
- Deputy Governor: Swaminathan J, M. Rajeshwar Rao, T. Rabi Sankar and Poonam Gupta
- Ownership: Ministry of Finance , Government of India
Static Current Affairs related to Shriram Finance for upcoming exams
- Chairman, Independent Director: Jugal Kishore Mohapatra
- Executive Vice Chairman: Umesh Govind Revankar
- Managing Director and CEO: Y S Chakravarti
- Managing Director & CFO: Parag Sharma
- No. Of Branches: 3,220 Branches (As on March 31, 2025)
0 Comments