RBI Slams True Credits Private Limited with ₹3.10 Lakh Penalty for Failing Enhanced Due Diligence
Reserve Bank Imposes Monetary Penalty on True Credits for KYC Non-Compliance
The Reserve Bank of India (RBI) has imposed a monetary penalty amounting to ₹3.10 lakh on True Credits Private Limited. This action follows a statutory inspection conducted by the regulator regarding the company's financial standing as of March 31, 2025. The penalty was finalized via an order issued by the RBI on June 5, 2026.The punitive action was taken in response to non-compliance with specific provisions laid out in the 'Reserve Bank of India (Know Your Customer (KYC)) Directions'. This measure utilizes powers conferred upon the RBI under Section 58G(1)(b) read with Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.
Failure to Conduct Enhanced Due Diligence Triggers Penalty
A supervisory finding led the RBI to initiate disciplinary proceedings against True Credits Private Limited. Based on these findings and related correspondence, a formal notice was issued, requiring the company to show cause regarding why a penalty should not be levied.After reviewing the company's response and considering oral submissions during a personal hearing, the RBI sustained a charge against True Credits. The core deficiency identified was the failure of the company to conduct necessary Enhanced Due Diligence (EDD) measures for certain customers. These customers were onboarded through non-face-to-face modes.
Regulatory Action and Compliance Directives
The decision underscores the stringent monitoring by the RBI regarding regulatory adherence in the financial sector. The penalty addresses deficiencies related solely to compliance standards, not transactional validity.It is crucial to note that this monetary penalty does not prejudice any other actions the RBI may initiate against True Credits Private Limited. This action aims specifically at enforcing compliance with established KYC directions and mandates from the central bank.
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