The Reserve Bank of India (RBI) has issued a stern warning to PTC India Financial Services Ltd, urging the non-banking financial company (NBFC) to promptly rectify significant lapses in its governance, compliance, business, and operational risks.
What Happened: The RBI’s warning came in the form of a letter dated September 18, addressed to the chairman of PTC India Financial Services, Moneycontrol reported. The letter placed emphasis on “critical gaps” in the company’s governance and oversight, business risk, compliance culture, operational risk, and IT and cyber security issues. The RBI has urged the board and the CEO of the NBFC to urgently address these concerns.
The RBI’s concerns are based on a supervisory assessment, which had previously identified deviations from loan sanction norms and excessive discretionary power to a former top official at PTC India Financial Services. This revelation cast a shadow on the company’s risk management practices and the strength of its governance framework.
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The central bank conducted an off-site assessment and Inspection for Supervisory Evaluation (ISE) of the company, under Section 45N of the RBI Act, 1934, from December 7 to 21, 2022. Subsequently, the risk assessment report (RAR) and inspection report (IR) were dispatched to the company on August 17.
The RBI’s letter also points out irregularities in the appointment of the company secretary and independent directors. It has also called for better management of non-performing assets and strengthening of the information systems for informed decision-making.
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