RBI imposes monetary penalty on M/s Srestha Finvest Limited, Chennai, Tamil Nadu

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on M/s Srestha Finvest Limited, Chennai, Tamil Nadu, under the RBI Act, 1934. RBI found that the company failed to obtain prior approval for the appointment of directors, in breach of directions applicable to a non-banking financial company - non-systemically important non-deposit taking company concerning acquisition or transfer of control of NBFCs. The company’s letter dated March 24, 2022 revealed a change in management involving more than 30% of directors (excluding independent directors). After issuing a show-cause notice and considering the company’s reply and oral submissions, RBI concluded that the contravention was substantiated and warranted penalty.