The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹71.30 lakh on Mahindra & Mahindra Financial Services Limited for non-compliance with provisions of the Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and the Know Your Customer (KYC) Directions, 2016.
According to the central bank’s official release dated April 25, 2025, the penalty was imposed following deficiencies observed during the statutory inspection of the company’s financial position as on March 31, 2023. The inspection revealed multiple instances of regulatory non-compliance, prompting RBI to issue a show cause notice.
Despite receiving a response and hearing the company’s oral submissions, RBI found several violations to be sustained and warranting monetary penalty. These included:
- Failure to disclose processing fees and other charges in certain loan application forms;
- Non-furnishing of loan agreements and omission to clearly convey loan details in sanction letters to some borrowers;
- Omission to give final repayment notices to certain borrowers prior to the repossession or sale of vehicles;
- Allotment of multiple customer identification codes to individual customers, instead of using a Unique Customer Identification Code (UCIC).
The RBI clarified that the penalty was imposed solely for regulatory compliance failures and is not intended to comment on the validity of any contractual dealings with customers. The penalty does not preclude the regulator from initiating further action against the company.
