Mumbai: The Reserve Bank of India (RBI) has imposed monetary penalties on Muthoot Finance Limited as well as Muthoot Vehicle and Asset Finance Limited for non-compliance with the central bank’s Know Your Customer (KYC) directions.
The RBI has imposed a penalty of Rs 5.80 lakh on Muthoot Finance Limited and Rs 2.70 lakh on Muthoot Vehicle and Asset Finance Limited for the breach of its regulations, according to a statement issued on Friday.
The RBI said that it carried out statutory inspection of Muthoot Finance Limited with reference to its financial position as on March 31, 2025.
Based on the supervisory findings of noncompliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions.
After considering the company’s reply to the notice and oral submissions made during the personal hearing, RBI concluded that the company failed to put in place a system of periodic review of risk categorisation of accounts; and it also failed to put in place a robust software for effective identification and reporting of suspicious transactions.
In the case of Muthoot Vehicle and Asset Finance Limited also, the RBI conducted a statutory inspection of the company.
Based on the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions.
After considering the company’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the company failed to put in place a system of periodic review of risk categorisation of accounts, with such periodicity being at least once in six months.
According to the RBI, the action in both cases 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 companies with their customers.
The imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the companies, the RBI said.
(IANS)
