RBI imposed a fine of Rs 3.10 lakh on True Credits for KYC violation
The Reserve Bank of India has imposed a monetary penalty of ₹3.10 lakh on True Credits Private Limited under compliance monitoring in the non-banking financial sector. This action was taken under an order dated June 5, 2026, which involved the company’s failure to implement enhanced due diligence measures during onboarding of certain customers through non-face-to-face means.
Highlights
- RBI has imposed a monetary penalty of Rs 3.10 lakh on True Credits for violation of KYC guidelines.
- The investigation found that True Credits did not follow Enhanced Due Diligence measures in digital/non-face-to-face customer onboarding.
- RBI clarified that this action is based solely on regulatory deficiencies and does not affect any further possible action.
This article was translated from the original. Read the original version by our correspondent here.
Reason for the Penalty and Regulatory Process
According to a press release from RBI, this penalty was imposed for violations of certain provisions of the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions’. The central bank took this action by exercising powers under Section 58G(1)(b) and Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.RBI conducted a statutory inspection of the company with reference to its financial position as of March 31, 2025. Based on supervisory findings and related correspondence, a show cause notice was issued to the company, after which its written response and oral submissions during a personal hearing were considered.
After the investigation, RBI found that the company failed to implement Enhanced Due Diligence (EDD) measures for certain customers onboarded through non-face-to-face methods. The monetary penalty was imposed on this basis.
Impact on NBFC Compliance
The central bank clarified that this action is based on regulatory compliance deficiencies and is not intended to pronounce upon the validity of any transaction or agreement between the company and its customers. RBI also stated that this penalty does not affect any other action that may be taken in the future.This step indicates that regulatory expectations for KYC and customer verification processes, especially in digital or non-face-to-face onboarding, remain stringent for non-banking financial companies. Adherence to enhanced due diligence measures continues to be an important part of the sector’s compliance framework.
Our previous report discussed the steps taken by the government and RBI to increase foreign capital inflows, including tax relief on government bond investments for FPI, expansion of the Fully Accessible Route, and measures to enhance foreign exchange liquidity. The article also noted that the aim of these policy steps is to ease balance of payments pressures and banking funding challenges, though according to experts, this may be only a partial solution compared to the full need.
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