The Reserve Bank of India has imposed a monetary penalty of ₹2.70 lakh on KLM Axiva Finvest Limited. The RBI penalty on KLM Axiva Finvest was ordered on September 22, 2026, for non-compliance with auction procedure directions. This action highlights the central bank’s continued focus on protecting borrower rights.
Key Details of the RBI Penalty on KLM Axiva Finvest
RBI conducted a statutory inspection of KLM Axiva Finvest with reference to its financial position as on March 31, 2025. The inspection revealed a serious compliance failure. Specifically, the company failed to pay surplus auction proceeds to certain borrowers after selling their pledged gold articles.
When a lender auctions pledged gold, any amount over and above the outstanding loan must go back to the borrower. However, KLM Axiva Finvest did not follow this rule in several cases. As a result, RBI issued a show-cause notice to the company before taking further action.
The company submitted a written reply and additional documents. It also made oral submissions during a personal hearing. After reviewing all submissions, RBI found the charge sustained and imposed the ₹2.70 lakh fine under Section 58-G(1)(b) read with Section 58-B(5)(aa) of the Reserve Bank of India Act, 1934.
What This Means for Borrowers and NBFCs
This penalty sends a clear message to all non-banking financial companies handling gold loans. Therefore, NBFCs must ensure they return surplus auction proceeds to borrowers promptly and accurately. Failing to do so can attract regulatory action from RBI.
Additionally, RBI clarified that this penalty addresses regulatory compliance deficiencies only. It does not question the validity of any transaction or agreement between KLM Axiva Finvest and its customers. Meanwhile, the central bank reserves the right to initiate further action against the company if needed.
For borrowers, this case is an important reminder to track their pledged gold loan accounts closely. If a lender auctions your gold, you are entitled to receive any surplus amount. Customers should proactively follow up with their NBFC if such payments are delayed.
Source: RBI Press Releases
