Mumbai: The RBI on Friday said it has imposed a penalty of Rs 3.1 lakh on Har Fincorp Ltd for non-compliance with certain provisions related to the FA Code of Practice.

However, the Reserve Bank said the penalty is based on deficiencies in regulatory compliance and is not intended to impact the validity of the transactions or agreements entered into by the company with its customers.

The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2023.

On the basis of supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty would be imposed on it for failure to comply with the directions. Should not be imposed. Said.

"After considering the company's reply to the notice, the oral submissions during the personal hearing and examining the additional submissions made by it, the RBI found, inter alia, that ... the allegation against the company was sustained, Due to which it was necessary to impose monetary penalty,” the central bank said.

It said Hero Fincorp did not give the loan terms and conditions in writing to borrowers in a local language understood by them.

RBI also said that the imposition of monetary penalty will not have any adverse effect on any other action that may be initiated against the company.