RBI imposes High Penalty of 20 lakhs on NBFC Firm
In a recent development, the Reserve Bank of India (RBI) has imposed a significant penalty on a company engaged in providing loans to individuals.
The regulatory authority, citing violations of rules, has fined a Thrissur-based Gold Loan Company for its failure to comply with regulatory standards.
Manappuram Finance Faces Heavy Fine
Manappuram Finance, a prominent player in the lending industry, has been hit with a penalty of Rs 20 lakh by the RBI.
The fine has been imposed due to the company’s non-compliance with certain provisions of the Non-Banking Financial Company (NBFC) rules.
It is important to note that this penalty does not affect any ongoing transactions or deals.
RBI’s Inspection and Directives
The RBI conducted a comprehensive inspection of Manappuram Finance’s financial position, covering the period until March 2021. Based on the findings, the central bank issued specific directives.
The inspection revealed violations of regulations, leading to the imposition of the penalty.
Additionally, the bank has instructed the company to segregate its outstanding gold loan accounts that have been due for more than 90 days.
Further Irregularities Unearthed
The RBI has discovered that the company has failed to maintain the mandatory loan-to-amount ratio in certain accounts since 2011.
Moreover, several other issues were identified during the investigation.
The RBI has emphasized that the fine is a result of the company’s unsatisfactory response to the regulatory concerns.
RBI’s Ongoing Vigilance
It is worth noting that the Reserve Bank of India regularly monitors the financial condition of banks and finance companies, taking action against any violations of rules or regulations.
Whether through fines or bans, the RBI ensures that necessary measures are taken to maintain compliance in the industry.
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