The Reserve Bank of India has imposed a monetary penalty of ₹8.10 lakh on Shri Ram Finance Corporation Private Limited for failing to comply with regulatory directions covering governance and Know Your Customer requirements.
The penalty was imposed through an order dated August 19, 2026. RBI said the action was taken under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934.
RBI’s statutory inspection of the company examined its financial position as on March 31, 2025. Following supervisory findings and related correspondence, the central bank issued a notice asking the company to explain why a penalty should not be imposed for non-compliance with its directions.
The regulator considered the company’s response to the notice, further submissions and oral representations made during a personal hearing before deciding that the charges were sustained.
Findings cited by RBI
The company did not obtain prior written permission from RBI before appointing a director, an appointment that resulted in a change in management. The change involved more than 30 per cent of the company’s directors, excluding independent directors.
RBI also found that the company had not established a system for classifying customers into low, medium and high-risk categories. The categorisation requirement forms part of the compliance issues cited in the action.
In addition, certain customer KYC records were not uploaded to the Central KYC Records Registry within the prescribed timeline, according to the regulator.
RBI said the penalty reflects deficiencies in regulatory compliance. It does not amount to a finding on the validity of any transaction or agreement entered into by the company with its customers.
The central bank also stated that imposing the monetary penalty does not prevent it from taking any other action against the company. The order followed consideration of the company’s written and oral submissions, as well as the findings from the inspection.
