RBI imposes penalty on Muthoot Finance, Manappuram Finance

RBI imposes penalty on Muthoot Finance, Manappuram Finance
Image Source : FILE RBI imposes penalty on Muthoot Finance, Manappuram Finance

The RBI on Thursday stated it has imposed a penalty of Rs 10 lakh on Muthoot Finance, Ernakulam, for non-compliance with instructions on sustaining mortgage to worth ratio in gold loans and on acquiring a replica of the PAN card of the borrower whereas granting gold loans of over Rs 5 lakh.

The central financial institution has additionally imposed a penalty of Rs 5 lakh on Manappuram Finance, Thrissur for non-compliance with instructions on verification of possession of gold jewelry.

Regarding Muthoot Finance, the central financial institution stated the statutory inspection of the corporate just about its monetary place as on March 31, 2018 and March 31, 2019, revealed non-compliance with the instructions issued by it.

A discover was issued to the corporate advising it to “show cause as to why penalty should not be imposed for failure to comply” with the instructions issued by the Reserve Bank of India (RBI).

After contemplating the corporate’s reply to the discover, oral submissions and examination of extra submissions made by it, RBI concluded that the “charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty”.

Similarly, within the case of Manappuram Finance, RBI stated statutory inspection of the corporate just about its monetary place as on March 31, 2019, revealed non-compliance with the instructions issued by it.

In this case, additionally discover was issued and after contemplating the corporate’s reply, oral submissions, and examination of extra submissions made by it, RBI concluded that the cost of non-compliance with instructions was substantiated and warranted imposition of financial penalty.

In each the instances, RBI stated the motion towards the businesses is predicated on deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the corporate with its clients. 

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