The Reserve Bank of India (RBI) has imposed a monetary penalty Rs 5 lakhs on Muthoot Housing Finance Company Limited for non-compliance with certain provisions issued by the RBI relating to governance. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 52A of the National Housing Bank Act, 1987, the RBI said.
The statutory inspection of the company was conducted by the National Housing Bank with reference to its financial position as on March 31, 2022. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why maximum penalty should not be imposed on it for its failure to comply with the said directions, the RBI said.
After considering the company’s reply to the notice and oral submissions made by it during the personal hearing, RBI found that the company failed to take prior written permission of the RBI for change in management resulting in change of more than 30 per cent of its directors, excluding independent directors, warranting imposition of monetary penalty, the RBI said.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company, the RBI said.