RBI Imposes ₹5 lakh penalty on Muthoot Housing Finance
- The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹5,00,000/- (Rupees Five Lakh only) on Muthoot Housing Finance Company Limited by an order dated August 7, 2024. The penalty was levied due to the company’s non-compliance with certain provisions of the ‘Non-Banking Financial Company – Housing Finance Company (Reserve Bank) Directions, 2021’ related to ‘Governance.
The penalty follows a statutory inspection of the company conducted by the National Housing Bank, which assessed the company’s financial position as of March 31, 2022. Based on supervisory findings and related correspondence regarding non-compliance with RBI directions, the company was issued a notice to show cause why the maximum penalty should not be imposed for its failure to adhere to the specified directions.
After reviewing the company’s response to the notice and considering the oral submissions made during the personal hearing, the Reserve Bank of India concluded that the company failed to obtain prior written permission from the Reserve Bank of IndiaI for a management change that resulted in more than 30 percent of its directors being replaced, excluding independent directors. This failure warranted the imposition of the monetary penalty.
The RBI clarified that this penalty is based on deficiencies in regulatory compliance and does not affect the validity of any transaction or agreement entered into by the company. Additionally, this action does not preclude the possibility of further action by the RBI against the company.
