New Delhi:
The Reserve Bank of India has fined Hero Fincorp, a non-banking financial company under the Hero Group, lakhs of rupees.
This amounts to a total penalty of Rs 3.10 lakh due to non-compliance with certain rules outlined in the Fair Practice Code.
The RBI clarified that this action was taken for regulatory reasons and assures that customers will not be impacted by this fine.
Accused of not explaining the loan terms properly
The Reserve Bank stated that Hero Fincorp didn’t provide written explanations of loan terms and conditions in the local language to its customers.
According to RBI rules, banks and NBFCs must provide written explanations of all rules in the local language when granting loans to customers.
Following a complaint, the RBI inspected the company on March 31, 2023.
After receiving a complaint against the company, the Reserve Bank initially issued a show cause notice.
However, the RBI was not satisfied with the company’s response.
As a result, the central bank imposed a fine of Rs 3.10 lakh on this NBFC.
What does Hero Fincorp do?
Hero Fincorp, affiliated with two-wheeler giant Hero MotoCorp, offers a range of financial services to customers.
The company offers loans for various purposes, including two-wheeler finance, home purchases, education, and SMEs.
The company has numerous branches across various cities nationwide.
Media reports suggest that the company might launch an IPO worth more than Rs 4000 crore soon.
