Summary
- Company is wholly owned subsidiary of Muthoot Finance
- The company had a loan book at Rs293.3 crore as of December 31, 2022
Kochi: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs10.50 lakh on Muthoot Money Ltd (MML).
RBI said in a notification on Thursday that the penalty was imposed on Muthoot Money for non-compliance with certain provisions of the ‘Monitoring of Frauds in NBFCs (Reserve Bank Directions, 2016’.
Muthoot Money is a wholly owned subsidiary of Muthoot Finance Group, the largest gold loan company in the country with Rs65,084.6 crore worth assets under management (AUM) on a consolidated basis as on December 31, 2022.
“The penalty has been imposed in exercise of powers vested in RBI under the provisions of 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,” the RBI notification added.
The non-compliance was detected following a statutory inspection of the company conducted by RBI with reference to its financial position as on March 31, 2021, along with other examinations.
The compo that focuses exclusively on vehicle finance had a loan book valued at Rs293.3 crore as of December 31, 2022, and has registered 24 per cent year on year growth as against Rs236.5 crore a year ago.
Having posted a loss of Rs2.9 crore for the first nine months of 2022-23 (FY23), Muthoot Money seems to be struggling to generate profit for some time now.
However, the 9-month loss in FY23 proves an improvement in performance compared with the larger loss of Rs8.1 crore the company reported for the nine months in the previous year.
Muthoot Money Ltd (MML) became a wholly owned subsidiary of Muthoot Finance Ltd in October 2018, and the operations are now centered in Hyderabad.