NEW DELHI, July 25: The Reserve Bank of India has imposed a penalty of Rs five lakh on Muthoottu Mini Financiers Pvt Ltd for violation of various RBI directions/orders from time to time.
RBI came to the conclusion that the violations as observed during inspection were of serious nature and were substantiated which warranted imposition of monetary penalty on the company. Accordingly, a penalty of Rs five lakh has been imposed on the company, the central bank said in a statement. It said an inspection of Muthoottu Mini Financiers Pvt Ltd was conducted during December 2013 under Section 45N of Reserve Bank of India Act, 1934.
It was observed that several regulatory violations were committed by the company relating to the guidelines on Loan to Value (LTV) ratio pertaining to gold loans, issuance and renewal of Non-Convertible Debentures (NCDs), loans against NCDs, adherence to Fair Practices Code (FPC), disclosures in the balance sheet , the RBI said.
On account of various contraventions to directions as pointed out in the inspection, the company was issued a Show Cause Notice (SCN) on July 25, 2014 for imposition of penalty.
The company’s response to the SCN was not found to be satisfactory, it said adding Muthoottu Mini Financiers was further accorded a personal hearing. (UNI)
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