The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3.10 lakh on Pahal Financial Services Private Limited for non-compliance with certain provisions of the RBI's Know Your Customer (KYC) Directions.

The penalty was levied through an order dated June 18, 2026, under the powers conferred on the RBI under Section 58G(1)(b) read with Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.

The action follows a statutory inspection conducted by RBI with reference to the company's financial position as of March 31, 2025. Based on supervisory findings and subsequent correspondence regarding regulatory non-compliance, the central bank issued a show-cause notice to the company.

After reviewing the company's response and oral submissions made during the personal hearing, RBI concluded that the company had failed to implement a robust software system for the effective identification and reporting of suspicious transactions, constituting a violation of KYC norms.

The RBI clarified that the penalty is based on deficiencies in regulatory compliance and does not affect the validity of any transaction or agreement entered into by the company with its customers. The regulator also noted that the action is without prejudice to any further measures that may be initiated against the company.