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The Reserve Bank of India (RBI) has, by an order dated August 14, 2026, imposed a monetary penalty of ₹6.20 lakh (Rupees Six Lakh Twenty Thousand only) on Northern Arc Capital Limited (the company) for non-compliance with certain provisions of the directions issued by RBI on ‘Disclosures in Financial Statements – Notes to Accounts’ and on ‘Internal Ombudsman for Regulated Entities’. This penalty has been imposed in exercise of powers conferred on RBI under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934. The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2025. Based on the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, 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 said directions. After considering the company’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found that the following charges against the company were sustained, warranting imposition of monetary penalty: i) The company did not disclose correct and complete information about customer complaints in its Annual Financial Statements for the financial year 2024-25. ii) The company failed to ensure auto-escalation of certain complaints that were partly or wholly rejected by the company’s Internal Grievance Redress Mechanism, to its Internal Ombudsman. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company. (Brij Raj) Press Release: 2026-2027/896 |
