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RBI imposes Rs 27.30 lakh penalty on ACRE for management fee violations
In Short
The central bank said the penalty was imposed through an order dated September 8, 2026, following its statutory inspection of ACRE, an asset reconstruction company (ARC), with reference to its financial position as of March 31, 2025.
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Reserve Bank of India (RBI)
Mumbai: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 27.30 lakh on Asset Care & Reconstruction Enterprise Limited (ACRE) for non-compliance with regulatory requirements related to the charging of management fees.
The central bank said the penalty was imposed through an order dated September 8, 2026, following its statutory inspection of ACRE, an asset reconstruction company (ARC), with reference to its financial position as of March 31, 2025.
"RBI has imposed a monetary penalty of Rs 27.30 lakh on Asset Care & Reconstruction Enterprise Limited for
non-compliance with certain provisions of the directions issued by RBI on income recognition," the central bank said.
"This penalty has been imposed in exercise of powers conferred on RBI
under the provisions of section 12 read with section 30A(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002," it added.
According to the RBI, its supervisory examination found that ACRE had not complied with regulatory directions relating to income recognition. The regulator subsequently issued a show-cause notice to the company seeking an explanation on the matter.
After considering ACRE’s response to the notice, its subsequent submissions and representations made during a personal hearing, the RBI concluded that the charge relating to management fees was established.
The penalty has been imposed under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
The RBI clarified that the action was taken specifically for regulatory compliance deficiencies and should not be interpreted as a determination on the validity of any transaction or agreement entered into by ACRE with its customers.
The central bank further said that the monetary penalty does not prevent it from initiating any other action against the company in the future, if warranted.
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