The Reserve Bank of India (RBI) has imposed monetary penalties on IIFL Samasta Finance Limited and The Hongkong and Shanghai Banking Corporation Limited (HSBC) for non-compliance with various regulatory directions. The penalties, announced on February 24, 2025, follow supervisory inspections of both financial institutions based on their financial positions as of March 31, 2023.
IIFL Samasta Finance Limited has been fined ₹33.10 lakh for violations of the Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016. The RBI found that the company charged interest on loans before actual disbursement, failed to classify overdue loan accounts as Non-Performing Assets (NPAs), misclassified certain NPAs as standard assets without recovering the entire due amount, and assigned multiple customer identification codes to individual borrowers instead of a Unique Customer Identification Code (UCIC).
HSBC has been penalized ₹66.60 lakh for non-compliance with RBI directions on Know Your Customer, Reporting of Information on Unhedged Foreign Currency Exposures of the Borrowers to Credit Information Companies (CICs), and Interest Rates on Deposits. The bank outsourced the closure of Anti-Money Laundering (AML) alerts to a group company, failed to report unhedged foreign currency exposures of certain borrowers to CICs, and opened savings deposit accounts for ineligible entities.
The penalties were imposed after the RBI reviewed the responses and oral submissions made by both institutions during the regulatory proceedings. The central bank clarified that these actions were based on deficiencies in regulatory compliance and do not impact the validity of any transactions between the entities and their customers. The RBI also stated that further action against the companies remains a possibility.