RBI Slaps Rs62.78 Lakh Penalty on Manappuram Finance and Anand Rathi Global Finance
Moneylife Digital Team 17 November 2023
Reserve Bank of India (RBI) has imposed monetary penalties worth Rs62.78 lakh on Manappuram Finance Ltd and Anand Rathi Global Finance Ltd for violating various laws prescribed by the regulator. The central bank imposed a Rs42.78 lakh penalty on Manappuram Finance from Kerala and Rs20 lakh on Anand Rathi Global Finance from Mumbai.
 
The penalty was imposed on Manappuram Finance for non-compliance with certain provisions of directions issued by RBI on non-banking financial company (NBFC) systemically important non-deposit-taking company and deposit-taking company.
 
RBI conducted the statutory inspection of the NBFC concerning its financial position as of 31 March 2022. RBI's examination of the risk assessment report (RAR), inspection report (IR), supervisory letter and all related correspondence revealed that Manappuram Finance failed to comply with the directions on payment to certain borrowers the surplus amounts realised by auction of gold articles pledged by those borrowers during the period from 1 April  2021 to 30 September 2022.
 
Anand Rathi Global Finance has been penalised for non-compliance with certain provisions of RBI directions on know—your—customer (KYC). The NBFC failed to carry out on-going due diligence of its customers when it did not undertake their risk categorisation and was unable to put into use any robust software for effective identification and reporting of suspicious transactions, RBI says.
 
In both cases, RBI said penalties are based on deficiencies in regulatory compliance and are not intended to pronounce on the validity of any transaction or agreement they entered into with their customers.
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