Banking & finance law in Hyderabad — regulatory complexity demands specialist legal authority, not general practice.
Banking and finance law at the intersection of RBI, SEBI, IRDAI, and DPDPA. SIRI Law LLP advises banks, NBFCs, payment companies, wealth managers, and financial intermediaries on the full regulatory stack — RBI Master Directions, SEBI frameworks, FEMA compliance, structured finance, and DPDPA obligations that now apply across every financial product.
Getting the scale of RBI enforcement right
RBI penalties are not the ₹50,000 crore some marketing pages claim. The real risk is different — and arguably worse.
A figure that circulates in a lot of banking-law marketing content puts aggregate RBI penalties over five years somewhere around ₹50,000 crore. That number doesn't hold up against RBI's own reporting. The RBI's Annual Report for FY25 recorded 353 enforcement actions across the entire regulated sector — banks, NBFCs, cooperative banks, housing finance companies — totalling approximately ₹54.78 crore for that year. Individual penalties typically run from a few lakh to a few crore; the headline monetary figure is not where the real exposure sits.
The actual risk is structural, not monetary. FY25-26 alone recorded roughly 70 separate enforcement actions against banks and NBFCs, with KYC lapses, Fair Practices Code violations, and related-party lending breaches the most common triggers. The financial penalty in any single case is rarely the story — the show-cause process, the reputational exposure, and the risk of escalation to licence-level action if remediation is judged inadequate matter far more than the rupee amount attached to the order. Treating RBI enforcement as a fine-avoidance exercise misreads what's actually at stake.
This lands at exactly the moment digital lending itself is under tighter scrutiny. The updated Master Direction on Digital Lending, effective April 2026, extended RBI's accountability framework from loan origination through the entire lifecycle, including AI-driven collections — meaning consent verification, calling-hour restrictions, and contact-frequency limits now apply with the same rigour to an automated system as to a human agent. For any NBFC or fintech running AI in underwriting or recovery, model governance has moved from a best-practice recommendation to a documented, auditable regulatory expectation.
Where financial regulation actually bites
Financial regulation is not a compliance checkbox. It is a governance discipline with real enforcement consequences.
These are the recurring patterns behind the inspections and disputes SIRI's banking practice handles most often.
RBI inspection failures expose personal liability
RBI inspections increasingly result in show-cause notices that carry personal liability for senior management. Most institutions are not prepared for the depth of regulatory scrutiny that modern RBI examinations involve.
DPDPA creates a new compliance layer on RBI obligations
Every financial institution now has DPDPA obligations layered on top of existing RBI data protection requirements, requiring specialist advisory to manage both simultaneously rather than as separate, inconsistent workstreams.
Third-party risk creates regulatory exposure
RBI outsourcing guidelines and DPDPA Data Processor obligations create a complex compliance matrix for every vendor relationship. Most financial institutions have not updated vendor contracts to reflect current regulatory requirements.
FinTech partnerships create unlicensed activity risk
Banks and NBFCs partnering with FinTech companies face significant regulatory risk if the partnership structure is not correctly designed. Unlicensed activity findings carry severe regulatory consequences.
What we cover
Banking and finance legal services across the full regulatory stack
From RBI framework compliance and SEBI advisory through structured finance, FinTech legal support, and banking dispute resolution.
RBI Regulatory Advisory
RBI Master Direction compliance, NBFC regulatory advice, payment aggregator legal support, digital lending framework compliance, and RBI inspection preparation and response management.
- NBFC category-specific compliance mapping
- Digital lending framework compliance
- AI model governance and explainability documentation
- Inspection preparation and response
SEBI Compliance & Capital Markets
SEBI compliance for listed companies, investment advisers, portfolio managers, and alternative investment funds — regulatory filings, internal audit frameworks, and SEBI investigation defence.
- Investment adviser and PMS compliance
- AIF regulatory filings
- Disclosure and insider trading advisory
- SEBI investigation defence
FEMA & Cross-Border Finance
FEMA compliance, foreign direct investment structuring, external commercial borrowing advisory, trade finance legal support, and RBI compounding applications for FEMA contraventions.
- FDI structuring and ECB advisory
- Trade finance legal support
- RBI compounding applications
- NRI remittance compliance
Structured Finance & Lending
Loan documentation, security creation and perfection, securitisation legal advisory, credit facility agreements, syndicated lending, and structured product legal documentation.
- Security creation and perfection
- Securitisation and receivables assignment
- Syndicated lending documentation
- Structured product legal review
FinTech Legal & Regulatory Advisory
FinTech partnership structuring, digital lending compliance, payment aggregator regulatory compliance, BNPL legal frameworks, and regulatory sandbox applications for innovative financial products.
- Bank/NBFC-fintech partnership structuring
- Payment aggregator licensing
- BNPL legal frameworks
- Regulatory sandbox applications
Banking Dispute Resolution
Recovery proceedings, SARFAESI Act applications, DRT proceedings, winding-up applications, IBC insolvency proceedings, and guarantee enforcement for banks and financial creditors.
- SARFAESI enforcement — secured creditor remedies
- DRT and DRAT representation
- IBC insolvency proceedings
- Guarantee enforcement
Evidence, not guesswork
What RBI enforcement actually looks like — the numbers behind the headlines
Marketing content in this space frequently overstates aggregate penalty figures. Here's what RBI's own reporting actually shows.
| Metric | Figure | Source period |
|---|---|---|
| Total enforcement actions | 353 | FY24-25 (RBI Annual Report) |
| Total penalty value across all actions | ₹54.78 crore | FY24-25 (RBI Annual Report) |
| Actions against cooperative banks | 264 penalties, ₹15.63 crore | FY24-25 |
| Actions against NBFCs/ARCs | 37 penalties, ₹7.29 crore | FY24-25 |
| Enforcement actions, banks and NBFCs | ~70 actions | FY25-26 |
| NBFC licence cancellations | ~150 licences, ₹54.78 crore in related penalties | 2026 year-to-date |
Sources: RBI Annual Report 2024-25; industry compilation of RBI enforcement actions FY25-26; NBFC licence cancellation tracking, 2026. Individual penalty amounts vary widely by violation and institution size — these are sector-wide aggregates, not predictions for any specific matter.
What the numbers actually mean
Four figures that frame banking regulatory risk today
Net Owned Fund requirement that must be maintained continuously, not just at registration — a common trigger for licence cancellation when unmet.
Against banks and NBFCs — KYC lapses and Fair Practices Code violations the most common triggers.
First Loss Default Guarantee cap on outstanding portfolio under RBI's digital lending framework — a key structuring constraint for co-lending arrangements.
From adverse RBI finding to a written advisory outcome with no monetary penalty — see the case study below.
How we engage
Four stages from instruction to regulatory confidence
From regulatory risk assessment through programme design, compliance management, and investigation defence.
Regulatory risk assessment
Comprehensive assessment of your current regulatory compliance posture across RBI, SEBI, FEMA, DPDPA, and CERT-In, producing a prioritised risk matrix with remediation recommendations.
Week 1Compliance programme
Policy and procedure update, vendor contract remediation, DPDPA implementation, RBI outsourcing framework review, and board-level governance documentation.
Weeks 2–6Managed compliance
Regulatory monitoring, circular and direction updates, annual compliance reviews, inspection preparation support, and real-time regulatory advisory as new requirements emerge.
OngoingInvestigation defence
RBI show-cause notice response, SEBI investigation management, enforcement action defence, and representation before regulatory authorities and tribunals.
As neededCase study · RBI inspection defence
NBFC successfully defends RBI inspection findings and avoids ₹5 Cr penalty
A Hyderabad NBFC received adverse findings from an RBI inspection relating to KYC gaps, digital lending framework non-compliance, and data localisation issues. SIRI Law LLP prepared the regulatory response, documented the remediation steps implemented, and represented the NBFC in enforcement proceedings.
The final outcome was a written advisory with no monetary penalty, against an initial exposure of approximately ₹5 crore — a result built on the same principle that runs through this practice: acknowledge findings where appropriate, document remediation evidence thoroughly, and calibrate the response rather than either over-conceding or antagonising the examiner.
Representative matters
Typical engagements
All matters described generically to protect client confidentiality.
Inspection remediation programme
Advised an NBFC on responding to an RBI inspection, managing regulatory correspondence, and implementing a remediation programme, avoiding formal enforcement action.
RBI authorisation process
Guided a fintech startup through the RBI payment aggregator authorisation process, including compliance programme design, net worth documentation, and system audit coordination.
SARFAESI enforcement coordination
Represented a scheduled bank in DRT recovery proceedings, obtaining a Recovery Certificate and coordinating SARFAESI enforcement of secured assets to achieve substantial recovery.
Lending model restructuring
Advised a digital lending platform on restructuring its lending model to comply with RBI's Digital Lending Guidelines, including LSP arrangements, escrow requirements, and KYC framework.
Why SIRI
Banking law with integrated cyber and DPDPA expertise
Banking regulation and DPDPA compliance are no longer separate workstreams. SIRI Law LLP manages both from a single integrated practice, eliminating the coordination gap that creates regulatory exposure.
RBI + DPDPA integration
We manage RBI regulatory obligations and DPDPA compliance as a unified programme, eliminating redundancy and producing governance documentation that satisfies both regulators simultaneously.
Cybersecurity legal + technical
RBI's IT framework requires both legal compliance and technical implementation. SIRI's in-house security team validates the technical controls your legal compliance requires, in a single advisory relationship.
RBI inspection ready
Our inspection preparation programme produces the documentation, governance evidence, and regulatory response frameworks that RBI examiners expect, significantly reducing the risk of adverse findings.
FinTech partnership structuring
Partnership between banks/NBFCs and FinTech companies involves the most complex regulatory structuring in Indian financial law. SIRI has structured partnerships that satisfy RBI requirements, DPDPA obligations, and commercial objectives simultaneously.
Frequently asked
Banking and finance law, answered directly
What RBI regulations apply to NBFCs?
NBFCs are regulated under the RBI Act 1934 and various Master Directions covering prudential norms, Fair Practices Code, KYC, IT governance, and outsourcing. The specific regulations depend on the NBFC category — NBFC-ICC, NBFC-MFI, NBFC-Factor, and NBFC-P2P Lending Platforms each have distinct requirements. SIRI maps your specific category obligations and designs a comprehensive compliance programme.
How does the DPDPA apply to banks and financial institutions?
Financial institutions are Data Fiduciaries under DPDPA 2023 for customer data they collect and process. This creates consent architecture obligations for digital onboarding, data sharing obligations with credit bureaus, breach notification requirements, and vendor DPA obligations — all in addition to existing RBI data protection requirements.
Does RBI require explainability for AI-based credit scoring?
RBI published a draft Guidance on Regulatory Principles for Model Risk Management in 2026, the first dedicated regulatory framework for AI and ML models used in credit underwriting, customer interaction, and other business processes across regulated entities. Credit underwriting models fall within its "material decision-making" category, which carries a higher explainability threshold — lenders need to be able to produce a human-readable basis for an adverse credit decision, not just a model output.
How large are RBI's enforcement penalties in practice?
Individual penalties are typically modest by absolute value — RBI's FY25 Annual Report recorded 353 enforcement actions totalling approximately ₹54.78 crore across the entire regulated sector for that year, with most individual penalties in the lakh range rather than crores. The real cost of an adverse finding is rarely the fine itself; it is the reputational damage, the show-cause process, and the risk of escalation to licence-level action if remediation is inadequate.
What is required for a payment aggregator to comply with RBI's payment aggregator guidelines?
Payment aggregators must comply with RBI's Master Direction on Payment Aggregators and Payment Gateways, covering merchant onboarding due diligence, escrow account management, data storage requirements, security standards, grievance redressal, and annual audit requirements.
How should a bank or NBFC respond to an RBI show-cause notice?
Immediately engage specialist regulatory counsel before submitting any response. The response must be carefully calibrated — acknowledging findings where appropriate, providing remediation evidence, presenting mitigating circumstances, and making legal submissions on jurisdiction and penalty quantum. The quality of the initial response significantly affects the final regulatory outcome.
Ready when you are
Financial regulation requires specialist counsel. Generalist advice creates regulatory exposure.
Book a confidential regulatory compliance assessment with SIRI Law LLP. We will map your obligations across RBI, SEBI, FEMA, and DPDPA, and design an integrated compliance programme.
Related services
Other ways SIRI Law LLP supports regulated financial businesses
Data privacy & cybersecurity law
DPDPA compliance, consent architecture, and breach notification protocols.
Taxation & regulatory compliance
GST, transfer pricing, and cross-border tax advisory for financial businesses.
AI & emerging technology law
AI governance frameworks and algorithmic liability for financial AI systems.
Visit or contact us
SIRI Law LLP — Hyderabad, India
| Registered office | HITEC City, Madhapur, Hyderabad, Telangana 500081, India |
| Telephone | +91 79819 12046 |
| info@sirilawllp.com | |
| Other offices | New Delhi, India · Austin, Texas, USA · Online worldwide |
| Hours | Mon–Sat, 9:30 AM – 7:00 PM IST · Emergency line 24/7 |