RBI imposes monetary penalty on Muthoot Housing Finance Company Limited
Case Brief
By an order dated August 7, 2024, RBI imposed a monetary penalty of ₹5,00,000 on Muthoot Housing Finance Company Limited under section 52A of the National Housing Bank Act, 1987. The penalty was for non-compliance with the NBFC-HFC Directions, 2021 on governance, specifically for failing to obtain prior written permission of RBI before a change in management that resulted in a change of more than 30% of its directors, excluding independent directors.
RBI imposed a monetary penalty under section 52A of the National Housing Bank Act, 1987 after supervisory findings showed non-compliance with the RBI's Non-Banking Financial Company - Housing Finance Company (Reserve Bank) Directions, 2021 relating to governance. The company was found to have changed more than 30% of its directors, excluding independent directors, without prior written permission from RBI.
Severity Assessment
The action is a monetary penalty of ₹5 lakh, which falls in the lowest monetary band (up to ₹5 lakh) and carries no additional operational restriction.
The company must bear the monetary penalty, and the finding highlights a governance compliance lapse. RBI has also clarified that the penalty is without prejudice to any other action that may be initiated, so further supervisory or enforcement steps remain possible.
Published as Muthoot Housing Finance Company Limited
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