RBI Penalty
The Reserve Bank of India has imposed a penalty of Rs 3.1 lakh on non-banking financial company (NBFC) Hero Fincorp. This penalty has been imposed for non-compliance with certain provisions related to transaction rules. Hero Fincorp is accused of not providing loan terms and conditions in writing to borrowers in a local language they can understand. As on 31st March 2023 RBI examined the financial position of the company.
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A show cause notice was issued
A show-cause notice was issued to Hero Fincorp for non-compliance with the RBI’s instructions and the correspondence in this regard came to light. The Reserve Bank of India said that after considering the company’s response to the notice and based on the personal hearing, the RBI found that the allegations against the company persisted and therefore required the imposition of monetary penalty.
#RBI said it has imposed a penalty of Rs 3.1 lakh on #HeroFinCorp Limited for non-compliance with certain provisions relating to fair practices code#companyhttps://t.co/LRcHPUg5W7
— Zee Business (@ZeeBusiness) May 25, 2024
Hero Fincorp was incorporated in December 1991 as Hero Honda Finlease Limited. Hero MotoCorp is the financial services arm of the two-wheeler company. Hero Fincorp offers a range of financial facilities including two-wheeler financing, home advance in the affordable housing segment, education loans and loans to small and medium enterprises. The company is preparing to launch an IPO worth Rs 4000 crore.
What will be the impact on consumers?
The RBI has clarified that the penalty was imposed only because the company did not properly comply with the rules. This will not affect the Company’s customers or any transaction between the Company and the customer.
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