The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 lakh on Pinnacle Capital Solutions Private Limited, Jharkhand, for non-compliance with RBI directions on Default Loss Guarantee (DLG) in digital lending. The penalty was levied through an order dated December 9, 2025, under the provisions of Section 58G(1)(b) read with Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.

The action followed RBI’s scrutiny of the company’s digital lending operations. Based on supervisory findings, RBI issued a show-cause notice to the company, seeking an explanation for the alleged violations. After examining the company’s written response and oral submissions during a personal hearing, the central bank concluded that the company had breached regulatory norms.

According to RBI, Pinnacle Capital Solutions had obtained a Default Loss Guarantee from a Lending Service Provider that exceeded the permitted limit of five per cent of the outstanding loan portfolio, in violation of RBI guidelines.

RBI clarified that the penalty is based on regulatory compliance deficiencies and does not reflect on the validity of any transactions or agreements entered into by the company with its customers. The central bank also noted that the imposition of the penalty is without prejudice to any further action that may be initiated against the company.