RBI Imposes Rs 3.1 Lakh Penalty on Hero FinCorp for Fair Practices Code Violation

RBI Imposes Rs 3.1 Lakh Penalty on Hero FinCorp for Non-Compliance with Fair Practices Code.

Expert Analysis:

• Penalty Imposed: The Reserve Bank of India (RBI) imposed a penalty of Rs 3.1 lakh on Hero FinCorp Limited.

• Reason for Penalty: The penalty was due to non-compliance with fair practices code provisions, specifically for failure to communicate loan terms in the vernacular language understood by borrowers.

• Validity of Transactions: The penalty does not affect the validity of any transactions or agreements with customers.

• Statutory Inspection: The RBI conducted a statutory inspection of Hero FinCorp, examining its financial position as of March 31, 2023. This inspection uncovered instances of non-compliance with RBI directives.

• Supervisory Findings: Supervisory findings indicated non-compliance with RBI directives.Correspondence was exchanged, and a notice was issued to Hero FinCorp to explain why a penalty should not be imposed.

• Company's Response and Hearing: Hero FinCorp responded to the notice, participated in oral submissions during a personal hearing, and provided additional submissions.

• Further Actions: The RBI clarified that this penalty is without prejudice to any other actions that may be initiated against Hero FinCorp.