Belstar Microfinance and Sundaram Home Finance penalised by RBI

The Reserve Bank of India (RBI) announced on Friday that it had fined Belstar Microfinance Rs 3,10,000 and Sundaram Home Finance Rs 1,50,000 for not adhering to certain parts of the Know Your Customer (KYC) regulation, 2016.

According to the RBI, Sundaram Home Finance did not update certain customers’ KYC on a regular basis within the allotted time. Belstar Microfinance, meanwhile, contracted with certain external agents to handle decision-making related to assessing compliance with KYC standards.

Both companies received notices from the RBI, requiring them to provide justifications for their non-compliance and why penalties should not be imposed as per the specified directives.

Following a review of the companies’ responses to the notices, oral arguments presented during personal hearings, and examination of additional submissions, the RBI concluded that the charges against the companies were valid, warranting the imposition of financial penalties.