**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹5.30 lakh on IIFL Finance Limited due to non-compliance with directions issued by RBI on ‘Asset Classification’. This action follows a statutory inspection of the company’s financial position as of March 31, 2024, and a subsequent notice advising the company to show cause. The order was issued February 6, 2026, and announced February 13, 2026.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹5.30 lakh on IIFL Finance Limited.
* The penalty is for non-compliance with RBI directions on ‘Asset Classification’.
* The penalty is imposed under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934.
* **Basis for Penalty:**
* The penalty stems from findings of non-compliance identified during a statutory inspection of IIFL Finance Limited’s financial position as of March 31, 2024.
* IIFL Finance Limited failed to classify certain accounts as 'non-performing asset' on restructuring.
* **RBI's Stance:**
* The action is based on deficiencies in regulatory compliance.
* The action is not intended to pronounce upon the validity of any transaction or agreement between the company and its customers.
* The penalty is without prejudice to any other action that may be initiated by RBI against the company.
**Impact Analysis**
**IIFL Finance Limited**
* **Impact:**
* Subject to a monetary penalty of ₹5.30 lakh.
* Subject to potential reputational damage.
* May face increased scrutiny from RBI.
* **Action Required:**
* Pay the monetary penalty.
* Review and rectify its asset classification procedures to ensure compliance with RBI directions.
* Address the deficiencies identified in the statutory inspection.
**RBI**
* **Impact:**
* Demonstrates commitment to regulatory compliance.
* Potential to improve overall financial stability.
* **Action Required:**
* Monitor IIFL Finance Limited for compliance.
* Consider further actions if necessary.
Key Entities Referenced
Reserve Bank of India Act, 1934: Act under which RBI's powers are conferred.
Reserve Bank of India (RBI): The regulator imposing the monetary penalty.
IIFL Finance Limited: The entity on which the penalty is imposed.
Asset Classification: The directions issued by RBI for non-compliance.
Mumbai: Location of the RBI's central office.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
February 13, 2026
RBI imposes monetary penalty on IIFL Finance Limited
The Reserve Bank of India (RBI) has, by an order dated February 06, 2026,
imposed a monetary penalty of ₹5.30 lakh (Rupees Five Lakh Thirty Thousand only)
on IIFL Finance Limited (the company) for non-compliance with certain directions
issued by RBI on ‘Asset Classification’. This penalty has been imposed in exercise of
powers conferred on RBI under section 58G(1)(b) read with section 58B(5)(aa) of the
Reserve Bank of India Act, 1934.
The statutory inspection of the company was conducted by RBI with reference to
its financial position as on March 31, 2024. Based on supervisory findings of non-
compliance with RBI directions and related correspondence in that regard, a notice
was issued to the company advising it to show cause as to why penalty should not be
imposed on it for its failure to comply with the said direction.
After considering the company’s reply to the notice, oral submissions made during
the personal hearing and additional submissions made by it, RBI found that the
following charge against the company was sustained, warranting imposition of
monetary penalty:
The company failed to classify certain accounts as ‘non-performing asset’, on
restructuring.
This action is based on 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. Further, imposition of this monetary penalty is without
prejudice to any other action that may be initiated by RBI against the company.
(Brij Raj)
Press Release: 2025-2026/2112 Chief General Manager