RBI Penalises Hero Fincorp Rs 10 Lakh For Excess Interest And Ola Financial Services Rs 3.10 Lakh Over KYC Lapses

The Reserve Bank of India (RBI) has taken enforcement action against two non-banking entities, imposing monetary penalties on non-banking financial company (NBFC) Hero Fincorp Limited and digital payments firm Ola Financial Services Private Limited.

Hero Fincorp was fined ₹10 lakh for non-compliance with fair practices norms relating to interest collection, while Ola Financial Services, the financial services arm of ANI Technologies, was penalised ₹3.10 lakh for lapses under the central bank's Know Your Customer (KYC) directives.

Hero Fincorp Penalised For Excess Interest Collection

The central bank issued the order against Hero Fincorp on September 22, 2026, penalising the company under powers conferred by Section 58G(1)(b) read with Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.

The action followed a statutory inspection of Hero Fincorp’s financial position as of March 31, 2025. During supervisory scrutiny, the regulator established that the NBFC had violated provisions outlined in its guidelines on the 'Fair Practices Code for Lenders – Charging of Interest'. Specifically, the regulator found that the company had collected excess interest from borrowers across select loan accounts.

A show-cause notice was subsequently issued to the company. After reviewing Hero Fincorp’s written submissions and oral arguments presented during a personal hearing, the central bank concluded that the charge was substantiated and warranted a financial penalty.

Ola Financial Services Fined Over KYC Shortcomings

In a separate order dated September 24, 2026, the banking regulator imposed a penalty of ₹3.10 lakh on Ola Financial Services Private Limited under Section 30(1) read with Section 26(6) of the Payment and Settlement Systems Act, 2007.

The regulatory action stemmed from a statutory inspection of the company’s operations spanning January 2025 to November 2025. Based on supervisory findings, the RBI issued a show-cause notice concerning breaches of KYC norms. Following oral and written representations from the company, the RBI sustained the charge that Ola Financial Services had failed to carry out mandatory risk categorisation of certain customers.

The RBI clarified in both cases that the penalties were imposed solely due to deficiencies in statutory and regulatory compliance. The regulator affirmed that the enforcement orders do not pronounce upon the validity of any transaction or agreement entered into by either company with its customers.

Key Regulatory Takeaways

Highlights of the RBI Orders:

• Hero Fincorp: Penalised ₹10 lakh for collecting excess interest on certain customer loan accounts, in violation of Fair Practices Code directions.
• Ola Financial Services: Fined ₹3.10 lakh for non-compliance with KYC directives, specifically failing to conduct customer risk profiling.
• Statutory Nature: The penalties reflect supervisory deficiencies rather than legal rulings on customer contracts, though they remain without prejudice to any further regulatory action.

Market and Sector Implications

The monetary actions highlight the central bank’s persistent focus on conduct risk and fair lending practices across India's credit and payments landscape. In recent quarters, the RBI has repeatedly cautioned lenders against usurious interest rates, unfair penal charges, and non-transparent fee schedules.

For retail investors and market participants tracking NBFCs and fintech firms, the moves serve as a reminder that regulatory compliance and internal audit controls are critical metrics for institutional valuation and risk assessment. As digital penetration broadens customer onboarding across India, the regulator continues to enforce stringent adherence to customer protection standards and anti-money-laundering safeguards.

Tags: Reserve Bank of India Hero Fincorp Ola Financial Services NBFCs Fintech Banking Regulation