What changed
RBI, via an order dated June 24, 2026, penalised GIC Housing Finance ₹3.10 lakh for non-compliance with KYC Directions. The charge sustained was that the company did not have a system for periodic review of account risk categorisation at least once every six months. The penalty was imposed under Section 52A of the National Housing Bank Act, 1987.
What it means for you
This penalty signals that RBI is strictly enforcing KYC norms, especially periodic risk review requirements, for housing finance companies. Lenders must ensure their systems automatically trigger risk categorisation reviews at least every six months. Failure to do so can lead to monetary penalties, regardless of the underlying transaction validity.
What you must do
- Review your KYC policy to ensure risk categorisation of accounts is reviewed at least once every six months.
- Implement automated reminders or system controls to enforce periodic risk review cycles.
- Document all risk review actions and maintain audit trails for regulatory inspections.
- Train compliance and operations teams on the six-month review mandate under KYC Directions.
Who it affects
Housing finance companies, Compliance officers and risk management teams
What specific KYC requirement did GIC Housing Finance violate?
The company failed to put in place a system for periodic review of risk categorisation of accounts, with such review required at least once every six months.
Under which law was the penalty imposed?
The penalty was imposed under Section 52A of the National Housing Bank Act, 1987, which empowers RBI to penalise housing finance companies for non-compliance.
Does this penalty affect the validity of GIC Housing Finance's customer transactions?
No, the RBI clarified that the action is based on regulatory compliance deficiencies and is not intended to pronounce on the validity of any transaction or agreement with customers.