The RBI has levied a penalty of ₹6.20 lakh on Five Star Business Finance Limited for non-compliance with KYC and Fair Practice Code provisions.
Penalty Imposed on Five Star Business Finance Limited
On June 18, 2026, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹6.20 lakh on Five Star Business Finance Limited. This action was taken due to the company's non-compliance with certain provisions of the 'Reserve Bank of India (Know Your Customer (KYC)) Directions' and violations of the Fair Practice Code.
The penalty was ordered under Section 58G(1)(b) read with the Reserve Bank of India Act. The RBI underscored the importance of adhering to KYC norms and fair practices to protect stakeholders and maintain confidence in the financial system.
This enforcement action reflects the RBI's ongoing commitment to ensuring compliance among regulated entities. Companies should remain vigilant in fulfilling their regulatory obligations to avoid similar penalties.
Legal professionals advising financial institutions must emphasize the prudent implementation of compliance measures to mitigate risks associated with regulatory non-compliance.
Citations
- Reserve Bank of India (2026) Press Release 62979
