RBI Imposes Rs 3.10 Lakh Penalty on JM Financial Products Limited
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3.10 lakh on JM Financial Products Limited for non-adherence to requirements of the 'Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016'.
The penalty comes after a statutory inspection by the RBI, valuing the financial position of the company as of March 31, 2023. The inspection found the company to be non-compliant with some RBI directions, and the regulator issued a show-cause notice to the company asking why a penalty should not be levied.
After reviewing the company’s response, additional submissions, and oral representations during a personal hearing, the RBI determined that the charges were substantiated. The key issue highlighted was the company’s failure to disclose a material related party transaction in its Annual Report, violating RBI’s disclosure norms.
In a statement, the RBI made clear that the penalty was levied on account of regulatory compliance lapses and has no impact on the validity of transactions or arrangements with the firm's customers. The central bank further mentioned that this step is also without prejudice to any other regulatory action, if any, which can be initiated against the firm.
This development underscores the RBI’s commitment to enforcing stringent compliance standards in the non-banking financial sector, emphasizing transparency and accountability in financial reporting practices.
