RBI Imposes Penalties on Shri Ram Finance and Progfin; Know the Reason Here
The RBI imposed monetary penalties on Shri Ram Finance Corporation (INR 8.10 lakh) and Progfin (INR 2.70 lakh) for governance lapses, KYC compliance failures, and inadequate customer risk categorisation systems. Scroll below to know what the Reserve Bank of India said about Shri Ram Finance and Progfin.
The Reserve Bank of India (RBI) has imposed monetary penalties on Shri Ram Finance Corporation and Progfin for non-compliance with regulatory directions and statutory provisions. The central bank announced fines of INRÂ 8.10 lakh on Shri Ram Finance Corporation and INR 2.70 lakh on Progfin following supervisory evaluations.
Shri Ram Finance Corporation Penalised for Governance and KYC Lapses
Shri Ram Finance Corporation faced the Rs 8.10 lakh penalty due to multiple infractions regarding governance and customer due diligence. According to the RBI, the company "failed to take prior written permission of the RBI while appointing a director, resulting in a change in management, on account of a change in more than 30 per cent of its directors, excluding independent directors". Bank Holidays List August 2026: RBI Holiday Calendar With Dates for Weekend Offs.
Additionally, the firm failed to establish an adequate system to categorise its customers into low, medium, and high-risk categories. The central bank also noted that the company neglected to upload the Know Your Customer (KYC) records of certain customers onto the Central KYC Records Registry within the mandated timeline.
Progfin Fined Over Risk Review Deficiencies
Progfin was penalised Rs 2.70 lakh for shortcomings related to its risk management framework. The RBI stated that the company failed to implement a system for the periodic review of risk categorisation for customer accounts, a process required to be conducted at least once every six months. When Will RBI Launch Polymer Currency Notes? Governor Sanjay Malhotra Shares Timeline.
Regulatory Context
The penalties stem from statutory inspections and compliance reviews conducted by the central bank. The RBI noted that these actions are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers.
(The above story first appeared on LatestLY on Aug 22, 2026 08:24 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
