The penalty was imposed for non-compliance with certain provisions of the Master Direction- Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation).
In a statement, the central bank said a statutory inspection of IIFL Finance was conducted with reference to its financial position as on March 31, 2025.
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“Based on the 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 should not be imposed on it for failure to comply with the said directions,” it said.
After considering the company’s reply to the notice and oral submissions made during the personal hearing, RBI found that the charge against the company was sustained, warranting imposition of monetary penalty.
“The company had failed to pay the surplus amount realised from the auction of pledged gold articles, over and above the loan outstanding, to certain borrowers,” RBI said.The central bank also imposed a penalty of Rs 5.8 lakh on Appnit Technologies for non-compliance with certain directions issued by RBI on Know Your Customer (KYC) and Prepaid Payment Instruments (PPI).
It allowed PPI accounts, opened using Aadhaar OTP based e-KYC, to continue for more than one year without carrying out identification as per KYC Directions, RBI said.
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Appnit Technologies also failed to put in place a system of periodic review of risk categorisation of accounts, it added.
In both cases, the RBI penalties are based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the companies with their customers.