Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2.50 crore on L&T Finance Limited by order dated October 17, 2023. The penalty was levied for non-compliance with certain provisions of the RBI’s NBFC Directions, 2016. RBI’s inspection found that the company did not disclose risk gradation and the rationale for charging different interest rates to different categories of retail borrowers, failed to notify borrowers when it charged a higher penal interest rate than what had been communicated at sanction, and failed to notify borrowers of changes in loan terms and conditions when it charged an annualised interest rate higher than what was communicated at sanction. RBI stated that the action was based on deficiencies in regulatory compliance and did not pronounce on the validity of transactions or agreements with customers.
Action Snapshot
- Primary Impact
- Fine: Rs 2.50 Cr
- Entity Type
- NBFC
- Location