The Reserve Bank of India has imposed separate monetary penalties on Progfin Private Limited and Shri Ram Finance Corporation Private Limited for non-compliance with regulatory requirements covering Know Your Customer procedures and, in Shri Ram Finance’s case, governance-related directions.

An RBI order dated August 19, 2026, imposed a penalty of ₹2.70 lakh on Progfin. The action followed a statutory inspection conducted with reference to the company’s financial position as on March 31, 2025.

The central bank said the inspection and subsequent correspondence identified non-compliance with its directions. Progfin was issued a notice and given an opportunity to explain why a penalty should not be imposed. RBI considered the company’s response and oral submissions made during a personal hearing before determining that the charge was sustained.

The regulator found that Progfin had not established a system for periodic review of account risk categorisation at least once in six months. The finding relates to the company’s KYC compliance arrangements.

Shri Ram Finance Corporation Private Limited has been fined ₹8.10 lakh under an order dated the same day. Its statutory inspection also referred to its financial position as on March 31, 2025. RBI said the review found non-compliance with directions concerning governance and the Reserve Bank of India (Know Your Customer (KYC)) Directions.

Following a notice, the company submitted a reply, additional submissions and oral arguments during a personal hearing. RBI said three charges were sustained. The company had not obtained prior written permission from RBI when appointing a director that led to a change in management involving more than 30 per cent of its directors, excluding independent directors.

The regulator also found that Shri Ram Finance had not created a system to classify customers into low-, medium- and high-risk categories. In addition, KYC records for certain customers had not been uploaded to the Central KYC Records Registry within the prescribed timeline.

RBI said both penalties were imposed under powers provided by section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934.

The central bank clarified that the measures address deficiencies in regulatory compliance. They do not determine the validity of transactions or agreements entered into by either company with its customers. RBI also said the penalties are without prejudice to any other action it may initiate against the companies.