RBI Slaps ₹71.20 Lakh Penalty on IndusInd Bank, 3 NBFCs for Compliance Failures
Moneylife Digital Team 17 August 2026
Reserve Bank of India (RBI) has imposed penalties of ₹71.20 lakh on IndusInd Bank Ltd and three non-banking financial companies (NBFCs) for non-compliance with the directions issued by the banking regulator. The highest penalty of ₹59.20 lakh has been imposed on IndusInd Bank.
 
The three NBFCs penalised by RBI are: Northern Arc Capital Ltd, Muthoot MCred Ltd and Fusion Finance Ltd.
 
IndusInd Bank has been penalised for non-compliance with provisions of RBI directions on interest rates on deposits and securitisation of standard assets.
 
RBI’s statutory inspection found that IndusInd Bank had paid interest on deposits held in certain current accounts. The inspection also found that the lender had undertaken activities in the nature of synthetic securitisation.
 
Northern Arc Capital has been fined ₹6.20 lakh for non-compliance with the provisions of the RBI’s directions on disclosures in financial statements, notes to accounts and the internal ombudsman for regulated entities.
 
RBI found that Northern Arc Capital failed to disclose correct and complete information about customer complaints in its annual financial statements for FY24-25. It also failed to ensure the auto-escalation of certain complaints that were partly or wholly rejected by its internal grievance redress mechanism to the internal ombudsman. 
 
Similarly, during the inspection of Muthoot MCred, RBI found that the NBFC upgraded certain loan accounts that were non-performing assets to ‘standard' without repayment of the entire arrears of interest and principal on all credit facilities.
 
As a result, RBI penalised Muthoot MCred ₹3.10 lakh.
 
Fusion Finance has been penalised ₹2.70 lakh for non-compliance with certain provisions of RBI’s know-your-customer (KYC) directions.  RBI’s statutory inspection found that the NBFC had failed to put in place a system for periodic review of the risk categorisation of accounts, which is required to be conducted at least once every six months.
 
In all four cases, RBI clarified that the penalties are based on deficiencies in regulatory compliance and are not intended to pronounce on the validity of any transactions or agreements these entities entered into with their customers.
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