RBI fines Hinduja Leyland Finance ₹6.2 lakh for regulatory lapses

The Reserve Bank of India has levied a monetary penalty of ₹6.2 lakh on Hinduja Leyland Finance Limited following compliance violations uncovered during a regulatory inspection. The RBI identified multiple breaches of the regulatory framework governing non-banking financial institutions.

The central bank's enforcement action centred on two primary areas of non-compliance. First, the company failed to maintain a board-approved policy governing the pricing of microfinance loans, a requirement under RBI guidelines for entities operating in the microfinance segment. Second, the company engaged in activities constituting synthetic securitisation without proper authorisation, a practice that circumvents regulatory safeguards.

Synthetic securitisation—where financial institutions transfer credit risk while retaining economic exposure—falls under prohibited activities for most non-bank lenders. The RBI has consistently tightened oversight of such transactions to ensure financial stability and protect consumers.

The penalty reflects the central bank's ongoing commitment to strengthening governance standards across the financial sector. Hinduja Leyland Finance, a subsidiary of the Hinduja Group, has been directed to address the identified deficiencies and ensure compliance with all applicable RBI directives going forward.

The development adds to a series of recent enforcement actions by the RBI targeting governance and operational failures among non-banking financial institutions operating across the country.