Shri Ram Finance Corporation, Progfin Fined ₹10.80 Lakh by RBI for KYC, Governance Lapses
Moneylife Digital Team 24 August 2026
Reserve Bank of India (RBI) has imposed a total penalty of ₹10.80 lakh on two non-banking financial companies (NBFCs) Shri Ram Finance Corporation Pvt Ltd and Progfin Pvt Ltd for failing to comply with regulatory directions issued by the banking regulator. Shri Ram Finance Corporation has been fined ₹8.10 lakh while Progfin has been penalised ₹2.70 lakh.
 
Shri Ram Finance Corporation has been penalised by RBI for non-compliance with certain provisions of its directions on governance and know-your-customer (KYC) requirements.
 
During a statutory inspection, RBI found that Shri Ram Finance Corporation had appointed a director without obtaining the central bank's prior written approval. The appointment led to a change in management, as more than 30% of the directors, excluding independent directors, had changed.
 
The inspection also found that Shri Ram Finance Corporation had failed to put in place a system to classify customers into low, medium and high-risk categories, as required under RBI’s KYC directions. In addition, the NBFC had failed to upload the KYC records of certain customers to the central KYC records registry (CKYCR) within the prescribed timeline.
 
In the case of Progfin, the NBFC failed to put in place a system of periodic review of the risk categorisation of accounts, with such reviews occurring at least once every six months.
 
As a result, RBI penalised Progfin ₹2.70 lakh.
 
In both 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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