RBI Imposes Penalty on Manappuram Finance Limited

RBI Imposes Penalty on Manappuram Finance Limited The Reserve Bank of India (RBI) has imposed monetary penalty of ₹17,63,965/- (Rupees seventeen lakh sixty three thousand nine hundred and sixty five only) on Manappuram Finance Limited (the entity) for non-compliance with certain provisions of the Master Direction on Issuance and Operation of Prepaid Payment Instruments (PPIs) dated October 11, 2017 (updated as on February 28, 2020) and the Master Direction - Know Your Customer (KYC) Direction dated February 25, 2016(as updated on April 20, 2020). The penalty was issued by the RBI in accordance with Section 30 of the Payment and Settlement Systems Act of 2007. This action is based on regulatory compliance problems and is not intended to rule on the legality of any transaction or arrangement entered into by the entity with its consumers.

Background

The entity was found to be non-compliant with the RBI's instructions on KYC and minor PPI requirements. As a result, the entity was served with a notice requiring it to show cause why a penalty should not be imposed for violation with the orders. After reviewing the entity's answer and conducting a personal hearing, the RBI determined that the aforementioned accusation of non-compliance with RBI guidelines was proven and warranted the imposition of monetary penalties.