RBI Penalises Mahindra & Mahindra Financial Services ₹11.50 Lakh
Moneylife Digital Team 02 March 2026
Reserve Bank of India (RBI) has imposed a penalty of ₹11.50 lakh on Mumbai-based Mahindra & Mahindra Financial Services Ltd, a non-banking financial company (NBFC), for non-compliance with the directions issued by the banking regulator.
 
Mahindra & Mahindra Financial Services has been penalised by RBI for violations related to the fair practices code and the internal ombudsman framework applicable to regulated entities.
 
RBI’s statutory inspection observed that the NBFC had levied revised foreclosure charges on certain borrower accounts without incorporating appropriate provisions in the loan agreements.
 
The inspection also found that Mahindra & Mahindra Financial Services failed to escalate complaints that were partly or wholly rejected by its internal grievance redress mechanism to the internal ombudsman within the prescribed timeframe, and in certain cases did not communicate the final decision to complainants within the stipulated period.
 
After considering the reply and oral submissions of the NBFC during the personal hearing, RBI states that it has concluded that the non-compliance with its directions was substantiated and warranted the imposition of a monetary penalty.
 
RBI says the penalty imposed on Mahindra & Mahindra Financial Services 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.
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