RBI imposes monetary penalty on SG Finserve limited

New Delhi: On October 1, 2024, the Reserve Bank of India (RBI) imposed a monetary penalty of Rs 28.30 lakh on SG Finserve Limited (formerly known as M/s Moongipa Securities Limited). This penalty was imposed due to non-compliance with specific conditions under which the company was issued the Certificate of Registration (CoR) by RBI under section 45IA(5) of the Reserve Bank of India Act, 1934 (RBI Act).

The penalty has been imposed in the exercise of powers conferred on RBI under the provisions of clause (a) of sub-section (1) of Section 58G read with sub-section (6) of Section 58 B of the RBI Act.

The financial statements of the company for FY 2022-23 revealed inter alia, non-compliance with the specific conditions of the CoR. Based on the same, a notice was issued to the company advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the said conditions of the CoR.

After considering the company’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the company was sustained, warranting imposition of monetary penalty:

The company had accepted public funds and extended loans in violation of the specific conditions of the CoR issued to it.