RBI Imposes Rs2.50 Crore Penalty on L&T Finance
Moneylife Digital Team 20 October 2023
Reserve Bank of India (RBI) has imposed a penalty of Rs2.50 crore on L&T Finance Ltd for non-compliance with directions related to non-banking financial company (NBFC) systemically important non-deposit-taking company and deposit-taking company. 
 
According to RBI, the statutory inspection and examination of the risk assessment reports (RAR), inspection reports (IR), supervisory letters and all related correspondence revealed that L&T Finance did not disclose to its retail borrowers the gradation of risk and rationale for charging different interest rates to different categories of borrowers in the loan application form or sanction letter.
 
Further, L&T Finance also failed to notify its borrowers of the change in penal interest rate when it charged a penal interest rate higher than what was communicated at the time of sanction. The NBFC also failed to give notice of change in terms and conditions of loans to its borrowers when it charged an annualised rate of interest higher than what was communicated at the time of sanction.
 
After considering the reply and oral submissions of L&T Finance during the personal hearing, RBI says it has concluded that the non-compliance charges with its directions were substantiated and warranted the imposition of a monetary penalty.
 
RBI says the penalty imposed on L&T Finance is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered by the banks with their customers.
Comments
Free Helpline
Legal Credit
Feedback