RBI imposes monetary penalty on Village Financial Services Limited, Kolkata

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹5 lakh on Village Financial Services Ltd, Kolkata by order dated August 11, 2021. The penalty was for non-compliance with certain provisions of the RBI (Know Your Customer) Directions, 2016. RBI said a statutory inspection for the company’s financial position as on March 31, 2018 and March 31, 2019 found that it had failed to put in place robust software for effective identification and reporting of suspicious transactions. After issuing a show-cause notice and considering the company’s reply, oral submissions, and additional submissions, RBI concluded that the charge was substantiated and warranted penalty under the RBI Act, 1934.