By an order dated 15-07-2024, the Reserve Bank of India (‘RBI’) has imposed a penalty of Rs. 1,90,000/- on Muthoot Finance Limited (‘Muthoot Finance’) for non-compliance with certain provisions of Know your Customer (KYC) Directions, 2016 issued by the RBI.
Background
A statutory inspection of Muthoot Finance, with reference to its financial position, was conducted by the RBI on 31-03-2022. Subsequently, a show cause notice was issued to Muthoot Finance based on the supervisory findings of non-compliance with the RBI directions.
After considering the reply given by Muthoot Finance to the show cause notice, RBI found that the charge of allotting more than one Unique Customer Identification Code (UCIC) to its individual customers was sustained, and called for the imposition of a monetary penalty.
RBI clarified that this action was based on deficiency in regulatory compliance and was not related to the validity of any transaction or agreement between Muthoot Finance and its customers.