New Delhi : The Reserve Bank of India (RBI) on Friday announced that it has imposed a monetary penalty of ₹2.70 lakh on Muthoot FinCorp Limited for failing to adhere to regulatory guidelines pertaining to the Internal Ombudsman mechanism.
The penalty, imposed under the provisions of the Reserve Bank of India Act, 1934, follows a statutory inspection of the company’s financial status as of March 31, 2024.
In an official statement, the RBI said:
“The RBI has imposed a monetary penalty of ₹2.70 lakh on Muthoot FinCorp Limited (the company) for non-compliance with directions issued by RBI on ‘Internal Ombudsman’.”
According to the central bank, the penalty stems from deficiencies found during a routine inspection and subsequent correspondence. The RBI issued a show-cause notice to the company, asking why penal action should not be initiated for the violations.
After reviewing the company’s written and oral submissions during a personal hearing, the RBI concluded that Muthoot FinCorp had failed to establish a system for automatically escalating complaints—those partially or fully rejected by the company’s internal grievance redress mechanism—to the Internal Ombudsman, as mandated by regulatory norms.
“The company failed to establish a system of auto escalation of complaints that were partly or wholly rejected by the company’s internal grievance redress mechanism to its Internal Ombudsman,” the RBI noted.
The RBI emphasized that the penalty is strictly related to regulatory compliance issues and does not impact the validity of any transactions or agreements between Muthoot FinCorp and its customers.
The central bank also clarified that the imposition of this penalty does not preclude any further regulatory or enforcement action that may be warranted in the future.
