Lenders Law

  In the past year, the Reserve Bank of India (RBI) has imposed more than 100 monetary penalties on banks, NBFCs, fintechs, and cooperative institutions. These penalties span a wide range of compliance failures—from customer due diligence lapses to weak cyber security, and from outsourcing gaps to violations of lending norms. While the penalties differ in size, they all point to a common theme: regulatory compliance is non-negotiable . Here’s a breakdown of the most frequent reasons behind these actions. Category Typical Lapses Illustrative Orders Key Directions Change in management Failed to take prior written permission of the RBI before appointing a director Grewal Brothers Finance Company Private Limited (15 May, 2025) Mahindra Rural Housing Finance Limited (28 March, 2025) Habitat Micro Build Ind...

S. No. Policy Relevant Provision of Law Objective Remarks / Implementation Insights 1 Business Continuity Plan (BCP) & Disaster Recovery (DR) Policy Para 62, Reserve Bank of India (Non-Banking Financial Companies – Managing Risks in Outsourcing) Directions, 2025 Ensure uninterrupted business operations during disasters or cyberattacks. Ensure vendors follow recovery protocols; conduct regular mock drills and resilience testing. 2 Fair Practices Code Para 7, Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025 Promote transparency, ethical lending, and borrower protection. Use plain-language communications; disclose all charges upfront; avoid hidden clauses. ...