RBI imposes monetary penalty on BNP Paribas, SMFG India Credit Company, 2 others for rule violations

In a statement, the RBI said the penalty has been imposed on the bank for non-compliance with certain directions issued by it on 'Interest Rate on Advances'.

The Reserve Bank of India (RBI) on September 13 said it has imposed monetary penalty on four entities viz., SMFG India Credit Company, BNP Paribas, Hewlett Packard Financial Services (India) Pvt Ltd, and Muthoot Vehicle & Asset Finance, for rule violations.

The central bank imposed a Rs 7.90 lakh penalty on Muthoot Vehicle & Asset Finance, Rs 23.10 lakh on SMFG India Credit Company, Rs 10.40 lakh on Hewlett Packard Financial Services (India) Pvt Ltd, Rs 31.80 lakh on BNP Paribas, RBI said in a release.

BNP Paribas was penalised as the bank failed to adopt uniform external benchmarks within the same loan category in respect of certain loans, the release said.

SMFG India Credit Company was penalised as the company did not ensure that the contract between the company and its outsourced vendors contained the provision concerning monitoring and oversight, did not conduct IS Audit for Network and Security Solutions since its inception, and did not ensure adequate storage/retention of audit logs of the email gateway and analyse or take action on a critical alert generated from Endpoint Detection & Response solution for malware detection from an infected server, the release added.

The central bank imposed monetary penalty on Hewlett Packard Financial Services (India) Pvt Ltd as the company failed to put in place a system of periodic review of risk categorization of accounts, disclose and explicitly communicate the rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers in the loan application form and the sanction letter, and form an IT Strategy Committee and an IT Steering Committee, RBI said.

Penalty on Muthoot Vehicle & Asset Finance was imposed as the company did not disclose the information on the Liquidity Coverage Ratio on its website, did not submit data concerning its gold loan customers to the four Credit Information Companies, and did not convey in writing the amount of loan sanctioned along with the terms and conditions, in the vernacular language as understood by the vehicle loan borrowers, through a sanction letter or otherwise, the release said.