The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 27.30 lakh on Asset Care & Reconstruction Enterprise Ltd for non-compliance with certain regulatory provisions related to income recognition.

The penalty was imposed through an order dated September 8, 2026, under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The RBI's statutory inspection of the company was conducted with reference to its financial position as of March 31, 2025. Following the inspection, the central bank issued a show-cause notice to the company regarding the identified regulatory deficiencies.

After considering the company's response, additional submissions and representations made during a personal hearing, the RBI concluded that the company had violated regulatory requirements concerning the charging of management fees.

The RBI clarified that the penalty relates to regulatory compliance deficiencies and does not question the validity of transactions or agreements entered into by the company with its customers. The penalty is also without prejudice to any other action that may be initiated against the company.