The Reserve Bank of India (RBI) has imposed a fine of lakhs of rupees on 6 financial companies including Muthoot Finance for not following the rules. RBI said that these companies have violated various regulatory rules. Therefore this action has been taken against him. RBI has also clarified that this penalty has been imposed only due to lack of compliance with the rules. This does not mean that there will be any direct impact on the deposits or transactions of the customers of these companies.
How much fine was imposed on which company?
According to the notification issued by RBI, a fine of Rs 5.80 lakh was imposed on Muthoot Finance. The highest fine of Rs 6.20 lakh was imposed on Avail Financial Services. A fine of Rs 3.10 lakh was imposed on Satya Microcapital. PAN Emami Cosmed was also fined Rs 3.10 lakh. A fine of Rs 2.70 lakh was imposed on Dhani Loans and Services. A fine of Rs 2.70 lakh was also imposed on Muthoot Vehicle and Asset Finance.
What was Muthoot Finance’s mistake?
According to RBI, Muthoot Finance had not made proper arrangements to periodically review the risk of customers’ accounts. Additionally, the company did not have a robust software system that could accurately identify suspicious financial transactions and report them in a timely manner. For this reason the company was fined. Apart from this, fine has been imposed on Avail because its Managing Director was also a director in two other NBFC companies. Also, the company had given loan to a single customer or group in excess of the prescribed limit.
What was PAN Emami Cosmed’s mistake?
PAN Emami has been penalized for giving loans beyond the prescribed limit to companies of the same group. Apart from this, Satya did not timely declare some loan accounts which were restructured as NPA. This is also against the rules of RBI.
Should customers worry?
Experts say that there is no need for customers of these companies to panic due to this action. RBI periodically inspects banks and non-banking financial companies (NBFCs). If a company is found lacking in following the rules, then a fine is imposed on it. Its objective is to keep the financial system safe, transparent and reliable. With such steps, companies follow the rules better in future and the interest of customers is also protected.
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