M&M Financial Services Receives Rs. 11.50 Lakh Monetary Penalty from RBI
Mahindra & Mahindra Financial Services Limited received a Rs. 11.50 lakh monetary penalty from RBI on February 27, 2026, following violations identified during annual inspection for FY ended March 31, 2025. The penalty addresses non-compliance with Fair Practices Code regarding foreclosure charges and Internal Ombudsman directions for complaint handling. The company has implemented corrective measures and strengthened internal controls to ensure regulatory compliance.
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M&M Financial Services has received a monetary penalty order from the Reserve Bank of India, marking a regulatory action against the non-banking financial company. The penalty order was received on February 27, 2026, at 4:00 p.m. IST, and the company has disclosed the details under SEBI listing regulations.
Penalty Details
The RBI has imposed a monetary penalty following its annual inspection of the company for the financial year ended March 31, 2025. The regulatory action stems from identified non-compliance issues with specific RBI directions.
| Parameter: | Details |
|---|---|
| Penalty Amount: | Rs. 11.50 Lakh |
| Imposing Authority: | Reserve Bank of India |
| Date of Receipt: | February 27, 2026 |
| Inspection Period: | FY ended March 31, 2025 |
Regulatory Violations
The RBI identified specific violations related to the Fair Practices Code and Internal Ombudsman directions after issuing a show cause notice and considering the company's replies and submissions.
Fair Practices Code Violations
The company levied revised foreclosure charges on certain borrower accounts without incorporating suitable conditions in their loan agreements. This practice violated the Fair Practices Code requirements established by the central bank.
Internal Ombudsman Compliance Issues
Two key failures were identified in the company's complaint handling mechanism:
- Escalation Delays: The company failed to escalate certain complaints that were partly or wholly rejected by its Internal Grievance Redress Mechanism to the Internal Ombudsman within the prescribed timeframe
- Communication Lapses: Final decisions were not communicated to complainants within the prescribed time in certain cases
Company Response and Impact
Mahindra & Mahindra Financial Services Limited has undertaken necessary corrective actions and strengthened internal controls to ensure strict compliance with all regulatory and supervisory obligations. The company stated that there is no impact on operations or other activities except for the financial impact of the monetary penalty levied.
Regulatory Framework
The disclosure was made under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, as required for material events. The company has also uploaded this intimation on its website under investor relations and regulatory filings section, ensuring transparency with stakeholders.
Historical Stock Returns for M&M Financial Services
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -3.19% | -1.34% | +3.78% | +43.69% | +36.46% | +88.85% |
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