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Anand Rathi Global Finance Faces ₹20 Lakh Penalty from RBI: Non-Compliance with KYC Directives

KYCAnand Rathi Global Finance Faces ₹20 Lakh Penalty from RBI: Non-Compliance with KYC Directives

On November 16, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹20 lakh on Mumbai-based Anand Rathi Global Finance Ltd. The penalty, issued through an order dated October 30, 2023, is a consequence of the company’s failure to comply with specific provisions of the Reserve Bank of India (Know Your Customer) Directions, 2016.

The regulatory action is a response to deficiencies in the company’s regulatory compliance and is explicitly stated not to challenge the validity of transactions or agreements between Anand Rathi Global Finance and its customers.

The breach involves the company’s failure to conduct ongoing due diligence of its customers, particularly neglecting the risk categorization of customers and failing to implement robust software for the effective identification and reporting of suspicious transactions, as mandated by RBI directives.

The RBI’s examination, conducted following a statutory inspection of the company’s financial position as of March 31, 2021, revealed the identified non-compliance. Subsequently, a notice was issued to the company, requiring it to show cause as to why a penalty should not be imposed for failing to comply with RBI’s directives.

After considering the company’s response and oral submissions during the personal hearing, the RBI concluded that the charge of non-compliance was substantiated, justifying the imposition of the monetary penalty.

By FCCT Editorial Team

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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