**Executive Summary**
RBI imposed a monetary penalty of ₹2.70 lakh on Muthoot FinCorp Limited for non-compliance with directions issued by RBI on ‘Internal Ombudsman’. The order was dated September 24, 2025, and is related to deficiencies in regulatory compliance identified during a statutory inspection as of March 31, 2024. The press release is dated September 26, 2025.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹2.70 lakh on Muthoot FinCorp Limited.
* The penalty relates to non-compliance with RBI directions on ‘Internal Ombudsman’.
* The penalty is imposed under specific sections of the Reserve Bank of India Act, 1934.
* **Basis for Penalty:**
* The statutory inspection of Muthoot FinCorp Limited was conducted with reference to its financial position as of March 31, 2024.
* The penalty was warranted after considering the company's reply to a notice, additional submissions, and oral submissions during a hearing.
* **Specific Deficiency:**
* Muthoot FinCorp Limited failed to establish a system of auto escalation of complaints that were partly or wholly rejected by the company's internal grievance redress mechanism to its Internal Ombudsman.
* **Disclaimer:**
* The action is based on deficiencies in regulatory compliance.
* The penalty does not pronounce on the validity of transactions with customers.
* The penalty is without prejudice to any other action that may be initiated by RBI.
**Impact Analysis**
**Muthoot FinCorp Limited**
* **Impact:** Financial penalty of ₹2.70 lakh and the need to address deficiencies in regulatory compliance, specifically the auto escalation of complaints within its internal grievance redress mechanism.
* **Action Required:** Pay the penalty and implement corrective measures to comply with RBI directions on ‘Internal Ombudsman’, including establishing a system of auto escalation of complaints.
**RBI**
* **Impact:** Exercise of regulatory oversight and enforcement of compliance with its directions.
* **Action Required:** Monitor Muthoot FinCorp Limited for compliance with corrective measures and potentially initiate further action if necessary.
Key Entities Referenced
Reserve Bank of India (RBI): Imposed monetary penalty on Muthoot FinCorp Limited
Muthoot FinCorp Limited: Entity penalized by the RBI for non-compliance with directions on 'Internal Ombudsman'
Reserve Bank of India Act, 1934: The act under which the penalty was imposed, specifically Sections 58B and 58G
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
September 26, 2025
RBI imposes monetary penalty on Muthoot FinCorp Limited
The Reserve Bank of India (RBI) has, by an order dated September 24, 2025,
imposed a monetary penalty of ₹2.70 lakh (Rupees Two Lakh Seventy Thousand
only) on Muthoot FinCorp Limited (the company) for non-compliance with directions
issued by RBI on ‘Internal Ombudsman’. This penalty has been imposed in exercise
of powers conferred on RBI under 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 statutory inspection of the company was conducted by RBI with reference to
its financial position as on March 31, 2024. Based on supervisory findings of non-
compliance with RBI directions and related correspondence in that regard, a notice
was issued to the company advising it to show cause as to why penalty should not be
imposed on it for its failure to comply with the said directions.
After considering the company’s reply to the notice, additional submissions made
by it and oral submissions made during the personal hearing, RBI found, inter alia,
that the following charge against the company was sustained, warranting imposition
of monetary penalty:
The company failed to establish a system of auto escalation of complaints that
were partly or wholly rejected by the company’s internal grievance redress
mechanism to its Internal Ombudsman.
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
company with its customers. Further, imposition of this monetary penalty is without
prejudice to any other action that may be initiated by RBI against the company.
(Puneet Pancholy)
Press Release: 2025-2026/1181 Chief General Manager