RBI imposes fine on Shriram City Union Finance, Hinduja Leyland Finance
The Reserve Bank has imposed a penalty of Rs 20 lakh on Shriram City Union Finance and Rs 5 lakh penalty on Hinduja Leyland Finance for violating fair practices code guidelines.
The regulator had conducted scrutiny of sample loan ccounts of Shriram City Union Finance during November 2015 and found it to be in violation of various provisions of Fair Practices Code guidelines.
The RBI said it served a show cause notice to the company and also called for a personal hearing, but response to the notice was not satisfactory.
"After considering facts of case ... RBI came to the conclusion that violations as observed during scrutiny were substantiated which warranted imposition of monetary penalty on the company. Accordingly, a penalty of Rs 20 lakh has been imposed on the company," the RBI said.
In the case of Hinduja Leyland Finance, an inspection of books and accounts of the company as on March 31, 2015, was conducted between December 30, 2015, and January 14, 2016.
"It was observed that charging of interest and its communication to the borrower was done in non-transparent manner which was in violation of the Fair Practices Code guidelines," the RBI said.
Based on show cause notice and personal hearing, company's response was not satisfactory and violations were substantiated which warranted imposition of monetary penalty on the company, the regulator said.
"Accordingly, a penalty of Rs 5 lakh has been imposed on the company (Hinduja Leyland Finance)," the RBI added.
(With PTI inputs)