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Muthoot Vehicle & Asset Finance Limited

NBFC

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 7.90 L

Monetary penalty · Fresh imposition

S2

Published by RBI

13 Sept 2024

Case Brief

RBI imposed a monetary penalty of ₹7,90,000 on Muthoot Vehicle & Asset Finance Limited by order dated September 11, 2024. The penalty followed a statutory inspection with reference to the company’s financial position as on March 31, 2022, and subsequent supervisory findings of non-compliance with RBI directions. RBI concluded that the company had failed to disclose its Liquidity Coverage Ratio on its website, had not submitted gold-loan customer data to the four Credit Information Companies, and had not conveyed the amount of loan sanctioned together with the terms and conditions in vernacular language to vehicle loan borrowers by sanction letter or otherwise. The penalty was imposed under the RBI Act, 1934 and the Credit Information Companies (Regulation) Act, 2005.

Why RBI Acted

Reporting & disclosureCustomer protectionLending norms

RBI imposed a monetary penalty on Muthoot Vehicle & Asset Finance Limited after a statutory inspection and supervisory review found sustained charges of non-compliance with RBI directions. The company failed to disclose Liquidity Coverage Ratio information on its website, did not submit data relating to its gold loan customers to the four Credit Information Companies, and did not communicate the loan sanction amount and terms and conditions in the vernacular language understood by vehicle loan borrowers through a sanction letter or otherwise. The penalty was imposed under Section 58G(1)(b) read with Section 58B(5)(aa) of the RBI Act, 1934 and Section 25(1)(iii) read with Section 23(4) of the Credit Information Companies (Regulation) Act, 2005.

Operating Impact

The company must absorb the monetary penalty and remain compliant with the cited RBI directions going forward. The release does not impose a business restriction, but it signals ongoing supervisory scrutiny and the possibility of further RBI action for the same or similar non-compliance. Borrowers and credit information system participants may be affected indirectly through improved disclosure and reporting compliance.

Regulatory Basis

  • 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
  • clause (iii) of sub-section (1) of Section 25 read with sub-section (4) of Section 23 of the Credit Information Companies (Regulation) Act, 2005

Action Facts

Primary Impact
Fine: Rs 7.90 L
Order Date
11 Sept 2024
Effective From
11 Sept 2024
Entities Affected
1
Entity Role
Primary
Entity Type
NBFC