This is to inform that in terms of powers conferred under the provisions of clause (b) of sub section (I) of section 58G read with clause (aa) of sub-section (5) of section 58B of the Reserve Bank of India Act, 1934, RBI had imposed a monetary penalty of INR 0.88 million on the Company for non-compliance with certain provisions of the RBI's directions on 'Liquidity Risk Management Framework for Non-Banking Financial Companies and Core Investment Companies'. RBI has mentioned that this action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Under the aforesaid RBI Circular regarding Liquidity Risk Management Framework, the Company is required to maintain Liquidity Coverage Ratio with effect from December 1, 2020 in the form of High Quality Liquid Assets (HQLA).

The Company has included callable Fixed Deposit (FDs) with scheduled commercial Banks as part of HQLA. RBI has considered these deposits as ineligible assets as HQLA for the computation of LCR. Thus, RBI has imposed penalty on the grounds of deficiencies in regulatory compliance considering that prescribed Liquidity Ratio has not been maintained as on March 31, 2022.

The above penalty will not have any material impact on the Company.