RBI imposes monetary penalty on Muthoot MCred Limited
The Reserve Bank of India (RBI) has, by an order dated August 14, 2026, imposed a monetary penalty of ₹3.10 lakh (Rupees Three Lakh Ten Thousand only) on Muthoot MCred Limited (Formerly Known as Muthoottu Mini Financiers Limited) (the company) for non-compliance with certain provisions of the directions issued by RBI on ‘Asset Classification’. This penalty has been imposed in exercise of powers…
On August 14, 2026, the Reserve Bank of India (RBI) penalized Muthoot MCred Limited, formerly known as Muthoottu Mini Financiers Limited, with a monetary fine of ₹3.10 lakh (Rupees Three Lakh Ten Thousand) for not adhering to specific RBI directives on 'Asset Classification'. The RBI's decision comes after conducting a statutory inspection, focusing on the company's financial position as of March 31, 2025.
Following supervisory findings of non-compliance and subsequent correspondence, the RBI issued a notice to Muthoot MCred Limited, inviting it to explain why a penalty should not be imposed for its failure to comply with the directives. After reviewing the company's response and additional submissions, the RBI concluded that the charge against the company was valid, leading to the penalty.
The penalty is imposed due to the company's practice of upgrading certain non-performing assets to 'Standard' without repaying the full interest and principal on the credit facilities. The RBI's action is solely for regulatory compliance and does not evaluate the validity of any transactions with customers. The monetary penalty does not preclude any further actions the RBI might take against the company.
Written by urgent.news from Reserve Bank of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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