AnyTime News 
Hero FinCorp Fined ₹10 Lakh
Excess Interest Collected From Certain Loan Accounts
Regulatory Action Under Fair Practices Code
Pooja Srivastava |
Anytime News Network
The Reserve Bank of India (RBI) has imposed a ₹10 lakh monetary penalty on Hero FinCorp Limited over non-compliance with certain provisions of its directions on the Fair Practices Code for Lenders – Charging of Interest.
The penalty was imposed through an order dated September 22, 2026, under the powers vested in the RBI by the Reserve Bank of India Act, 1934.
Excess Interest Under Scanner
At the heart of the regulatory action is the RBI’s finding that Hero FinCorp collected excess interest from certain loan accounts. The finding has put the spotlight on compliance with regulatory requirements governing interest charged to borrowers.
Inspection Triggers Action
The RBI conducted a statutory inspection of the company with reference to its financial position as on March 31, 2025. Supervisory findings and subsequent correspondence relating to non-compliance with RBI directions led to the issuance of a show-cause notice to the company.
The notice sought an explanation as to why monetary penalty should not be imposed for failure to comply with the applicable regulatory directions.
Company’s Response Examined
RBI considered the company’s response to the notice, its additional submissions and the oral submissions made during a personal hearing. Following its assessment, the central bank found that the charge relating to the collection of excess interest from certain loan accounts was sustained.
The finding resulted in the ₹10 lakh monetary penalty.
Borrower Protection in Focus
Interest charging is a critical component of lending and directly affects the financial burden borne by borrowers. Regulatory requirements governing interest practices are intended to promote transparency and fair dealing between lenders and customers.
The RBI clarified that its 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.
The central bank also stated that the monetary penalty is without prejudice to any other action that may be initiated against Hero FinCorp.
The action brings renewed regulatory focus on how lending institutions calculate and collect interest and underscores the importance of strict compliance with the RBI’s Fair Practices Code.
