RBI imposes monetary penalty on Mahindra Rural Housing Finance Limited

Case Brief

By an order dated March 26, 2025, RBI imposed a monetary penalty on Mahindra Rural Housing Finance Limited under Section 52A of the National Housing Bank Act, 1987. The penalty followed a statutory inspection by the National Housing Bank and subsequent supervisory proceedings. RBI held that the company failed to review risk categorisation periodically at least once every six months during FY 2022-23 and also failed to obtain prior written RBI permission before appointing a director after a change of more than 30% in its directors (excluding independent directors).