RBI imposes penalty on Muthoot Finance, Manappuram Finance
24 Nov 2020
Reserve Bank of India (RBI) has imposed penalties on gold loan providers Muthoot Finance and Manappuram Finance for norm violations for non-compliance of RBI directions on maintenance of loan-to-value ratio in gold loans, PAN card information and other directions.
The central bank on Thursday slapped Rs10 lakh fine on Muthoot Finance Limited and Rs5 lakh fine on Manappuram Finance for contravening RBI guidelines.
RBI said a statutory inspection of Muthoot Finance with reference to its financial position as on 31 March 2018 and 31 March 2019, revealed non-compliance with the above directions issued by RBI.
Further, a show-cause notice was issued to the company to explain as to why penalty should not be imposed for failure to comply with the directions.
"After considering the company's reply to the notice, oral submissions made during the personal hearings and examination of additional submissions made by it, RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty," it said.
Manappuram Finance has been found wanting in verifying ownership of gold jewellery. An inspection of Manappuram Finance with reference to its financial position as on 31 March 2019, showed that it has not complied with the directions issued by RBI, said another statement.
"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers," RBI said in separate statements.