RBI fines Power Finance Corporation for violation of rules

The Reserve Bank of India (RBI) imposed a penalty of Rs 8.80 lakh on Power Finance Corporation Ltd for violation of norms related to liquidity risk management framework for non-banking financial companies and core investment companies.

The statutory inspection of the company conducted by RBI, inter alia, revealed that the company did not maintain the prescribed Liquidity Coverage Ratio (LCR) of 60 per cent as on March 31, 2022 as a result of inclusion of ineligible assets as high quality Was.

As a result, 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 RBI directions.

After examining the company's response to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI came to the conclusion that the allegation of non-compliance with RBI directions was established and warranted imposition of monetary penalty. Done.

However, the RBI said the action is based on deficiencies in regulatory compliance and is not intended to adjudicate on the validity of any transaction or agreement entered into by the company with its customers.