**Executive Summary**
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2.70 lakh on Northern Arc Capital Limited for non-compliance with KYC directions, as per an order dated January 29, 2026. The penalty was levied following a statutory inspection with reference to its financial position as on March 31, 2024, and a subsequent notice to the company. This press release is dated January 30, 2026.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹2.70 lakh on Northern Arc Capital Limited.
* The penalty is for non-compliance with certain provisions of the ‘Reserve Bank of India [Know Your Customer (KYC)] Directions’.
* The order was issued on January 29, 2026.
* **Statutory Basis:**
* The penalty is imposed under powers conferred on RBI under Section 58G(1)(b) read with Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.
* **Inspection and Findings:**
* A statutory inspection of Northern Arc Capital Limited was conducted with reference to its financial position as on March 31, 2024.
* The inspection revealed non-compliance with RBI directions.
* The company was issued a notice to show cause why penalty should not be imposed.
* RBI found the charge against the company was sustained, warranting imposition of monetary penalty.
* **Specific Non-Compliance:**
* The company failed to put in place an IT system/software for effective identification and reporting of suspicious transactions.
* **Scope and Limitation:**
* The action is based on deficiencies in regulatory compliance.
* It is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers.
* The penalty is without prejudice to any other action that may be initiated by RBI against the company.
**Impact Analysis**
**Northern Arc Capital Limited**
* **Impact:** Financial penalty of ₹2.70 lakh and potential reputational damage due to non-compliance.
* **Action Required:** Implement necessary IT systems and software for effective identification and reporting of suspicious transactions, ensure compliance with KYC directives to avoid further penalties.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty.
Reserve Bank of India Act, 1934: Act under which the penalty was imposed; Section 58G(1)(b) read with Section 58B(5)(aa) are relevant provisions.
Reserve Bank of India [Know Your Customer (KYC)] Directions: The set of guidelines for which non-compliance resulted in the penalty.
Northern Arc Capital Limited: The entity on which the monetary penalty was imposed.
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
January 30, 2026
RBI imposes monetary penalty on Northern Arc Capital Limited
The Reserve Bank of India (RBI) has, by an order dated January 29, 2026,
imposed a monetary penalty of ₹2.70 lakh (Rupees Two Lakh Seventy Thousand
only) on Northern Arc Capital Limited (the company) for non-compliance with certain
provisions of the ‘Reserve Bank of India [Know Your Customer (KYC)] Directions’
issued by RBI. 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 the 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 failure to comply with the said direction.
After considering the company’s reply to the notice, additional submissions made
by it and oral submissions made during the personal hearing, RBI found, inter alia,
that the following charge against the company was sustained, warranting imposition
of monetary penalty:
The company failed to put in place any IT system / software for effective
identification and reporting of suspicious transactions.
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: 2025-2026/2025 Chief General Manager