RBI Imposes Monetary Penalty of Rs. 2.70 Lakh on Muthoot FinCorp Limited
The Reserve Bank of India (RBI) has issued a press release dated September 26, 2025, announcing the imposition of a monetary penalty of 2.70 lakh (Rupees Two Lakh Seventy Thousand only) on Muthoot FinCorp Limited (the company) via an order dated September 24, 2025, for non-adherence to its directions on ‘Internal Ombudsman’. The Reserve Bank of India (RBI) has imposed this monetary policy in exercise of its powers granted by clause (b) of sub-section (1) of Section 58G, read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.
In this regard, the central bank also did a legal inspection of the company in accordance with its financial position as of March 31, 2024. When it was confirmed that the RBI had genuinely disobeyed the directions issued by the RBI on ‘Internal Ombudsman,’ a show cause notice (SCN) was issued against the company specifying the statutory consequence of non-compliance, i.e., a penalty, and asking the company the reason why a particular action should be taken against it for its failure to comply with the said directions.
After reviewing the company’s response to the notice, its additional documents, and the points made during the personal hearing, the RBI discovered, inter alia, that one of the charges against the company was valid and hence decided to impose a monetary penalty on the company. The company was not able to launch a system to automatically forward complaints, which were partially or fully rejected by its internal grievance process, to the Internal Ombudsman.
These actions have been taken on the basis of mismatches in regulatory compliance, and it does not mean that any deals or agreements the company made with its customers are invalid. Also, the penalty is being imposed without affecting any other action RBI may take against the company in the future.
Refer to the official press release for complete information.
