RBI Imposes ₹28.30 Lakh Penalty on SG Finserve for Non-Compliance with Regulatory Conditions

RBI Imposes ₹28.30 Lakh Penalty on SG Finserve for Non-Compliance with Regulatory Conditions

The Reserve Bank of India (RBI) has imposed a penalty of ₹28.30 lakh on SG Finserve Limited, formerly known as Moongipa Securities, for failing to comply with specific conditions under its Certificate of Registration (CoR). The company's financial statements for the fiscal year 2023 revealed several violations, including the acceptance of public funds and the extension of loans, which breached the terms of its CoR.

In a statement, the RBI highlighted that SG Finserve's actions were in direct violation of the regulatory conditions set forth during its registration. The bank emphasized that penalties were based on regulatory compliance deficiencies and are not intended to reflect the validity of any transactions between the company and its customers.

Additionally, the RBI has imposed a ₹14 lakh penalty on Arunachal Pradesh Rural Bank for non-compliance with regulations regarding 'Strengthening of Prudential Norms - Provisioning Asset Classification and Exposure Limit' and 'Know Your Customer' (KYC) guidelines.

Furthermore, penalties were levied on three cooperative banks for contravening certain regulatory norms:

• Jilla Sahakari Kendriya Bank Maryadit, Bhind, Madhya Pradesh
• The Urban Co-operative Bank Ltd, Dharangaon, Maharashtra
• Sri Kalahasti Co-operative Town Bank Ltd, Andhra Pradesh

The RBI stressed that these penalties relate to deficiencies in regulatory compliance and are not judgments on the validity of customer agreements or transactions entered into by these institutions.