The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs. 6.20 lakh on Avail Financial Services Limited for violating regulatory norms related to governance and credit/investment concentration limits.

The penalty follows an RBI inspection based on the company's financial position as of March 31, 2025. After reviewing the inspection findings, the company's response, and oral submissions, the central bank concluded that regulatory violations had occurred.

According to RBI, the key violations included:

The company's Managing Director holding directorships in two other Middle Layer NBFCs, contrary to governance norms.

A breach of the single-party exposure limit prescribed under RBI regulations.

The RBI clarified that the penalty is based solely on regulatory compliance deficiencies and does not affect the validity of any customer transactions or agreements. It also stated that the action is without prejudice to any further regulatory measures that may be initiated against the company.