Recorded RBI impact
Fine: Rs 20.0 L
Monetary penalty · Fresh imposition
Published by RBI
24 Nov 2021
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹20 lakh on Mulamoottil Financiers Limited, Kozhencherry, Pathanamthitta District, Kerala. The penalty was imposed after statutory inspection and scrutiny found non-compliance with RBI directions relating to classification of non-performing assets and raising money through private placement by NBFCs-debentures. RBI said the company’s reply, oral submissions, and additional submissions were considered, but the charge of non-compliance was substantiated.
Why RBI Acted
RBI imposed a monetary penalty on Mulamoottil Financiers Limited after its statutory inspection and scrutiny revealed non-compliance with certain provisions of the RBI directions on classification of non-performing assets under the Master Direction for non-systemically important non-deposit taking NBFCs, and RBI Directions on Raising Money through Private Placement by NBFCs-Debentures. RBI concluded that the company’s reply and submissions did not rebut the charge and that the contraventions were substantiated under section 45JA and section 58G read with section 58B(5)(aa) of the RBI Act, 1934.
Operating Impact
The company must absorb the monetary penalty and address the compliance weaknesses identified by RBI. The order does not invalidate any customer transaction or agreement, but it signals heightened regulatory scrutiny over the NBFC’s asset classification and fundraising compliance practices.
Regulatory Basis
- section 45 J A
- clause (b) of sub-section (1) of section 58 G read with clause (aa) of sub-section (5) of section 58 B of the Reserve Bank of India Act, 1934
Action Facts
- Primary Impact
- Fine: Rs 20.0 L
- Order Date
- 24 Nov 2021
- Effective From
- 24 Nov 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- NBFC