On 24-05-2024, The Reserve Bank of India (‘RBI’) imposed a monetary penalty of Rs. 3,10,000/- on Hero FinCorp Limited for non-compliance with certain provisions of the Non-Banking Financial Company — Systematically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 issued by RBI which was related to Fair Practices Code.
Background
A statutory inspection was conducted by RBI regarding its financial position as of 31-03-2023.
RBI found that the charge against the company was sustained, and this warranted the imposition of a monetary penalty. It was also found that Hero FinCorp had failed to convey the terms and conditions of the loans in writing to the borrowers in the ordinary language understood by them.
RBI further clarified that this action was based upon deficiencies in regulatory compliance and does not relate to the validity of any transaction or agreement entered into by Hero FinCorp with its customers.