The Reserve Bank of India (RBI) has imposed a penalty of ₹10 lakh on Muthoot Finance Ltd, Ernakulam, and ₹5 lakh on Manappuram Finance Ltd, Thrissur, for non-compliance with its directions.

The Reserve Bank of India spoke that in the case of Muthoot Finance, the penalty is for non-compliance with directions on the maintenance of the Loan to Value (LTV) ratio in gold loans. And on obtaining a copy of the PAN card of the borrowers while granting loans above ₹5 lakh. This non-compliance was revealed through a statutory inspection of Muthoot Finance regarding its financial position as of March 31, 2018, and March 31, 2019, inter alia. RBI had issued a notice to the company to show cause as to why the penalty shouldn't be imposed on them for the failure to comply with RBI's directions.

The Reserve Bank of India told that in the case of Manappuram Finance, the statutory inspection or regarding its financial position as of March 31, 2019, revealed, inter alia, non-compliance with the RBI directions on verification of ownership of gold jewelry. The RBI had issued a show-cause notice, and after hearing the company out, decided to levy the penalty.