RBI slaps penalty of Rs 17.6 lakh on Manappuram Finance for violation of various guidelines

The Reserve Bank of India (RBI) on Monday imposed a monetary penalty of Rs 17.6 lakh on Manappuram Finance Ltd for the violation of various guidelines.

Fine levied on Manappuram Finance for non-compliance with certain provisions of the Master Direction on Issuance and Operation of Prepaid Payment Instruments (PPIs) and the Master Direction - Know Your Customer (KYC) Direction 2016, the RBI said in a statement.

The penalty has been imposed in exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007, it said.

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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 entity with its customers, it added.

RBI said, "It was observed that the entity was non-compliant with the directions issued by RBI on KYC and small PPI requirements. Accordingly, notice was issued to the entity advising it to show cause as to why penalty should not be imposed for non-compliance with the directions."

After considering the entity’s response and giving it a personal hearing, RBI concluded that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty, the statement said.