New Delhi: Manappuram Finance faces a monetary penalty imposed by the Reserve Bank of India (RBI) for breaches in regulatory compliance. The penalty, amounting to ₹42.78 lakh, is not a verdict on the validity of any transactions or agreements made by the company with its customers, clarified the RBI.
The RBI, through an order dated October 31, 2023, enforced the penalty on Manappuram Finance Limited of Thrissur for non-compliance with specific provisions outlined in the “Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.” This penalty was levied under the authority granted to the RBI by the Reserve Bank of India Act, 1934.
The regulatory inspection conducted by the RBI, referencing the financial position as of March 31, 2022, revealed discrepancies in the company’s adherence to RBI directives concerning the payment of surplus amounts realized from the auction of gold articles pledged by borrowers. The period under scrutiny was from April 01, 2021, to September 30, 2022.
Following the findings, the company received a notice to explain why a penalty should not be imposed for non-compliance with RBI directions. After reviewing the company’s response, additional submissions, and oral arguments during a personal hearing, the RBI concluded that the charges of non-compliance were substantiated, justifying the imposition of the monetary penalty.
