RBI slaps penalty on Muthoot Finance subsidiary

Muthoot Finance holds over 66% stake in Belstar Microfinance

BBN Bureau

KOCHI: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs3.1 lakh on the Muthoot Finance subsidiary, Belstar Microfinance Ltd.

RBI said the penalty has been slapped for non-compliance with certain provisions of the RBI’s Know Your Customer (KYC) directions.

“This penalty has been imposed in exercise of powers conferred on RBI under the provisions of clause (b) of sub-section (1) of section 58G read with clause (aa) of sub-section (5) of section 58B of the RBI Act, 1934,” an official statement added.

Muthoot Finance, the largest gold loan company in the country, holds a little over 66 per cent stake in Belstar Microfinance.

Belstar Microfinance, a non-banking finance company – micro finance institution (NBFC-MFI), which is currently working on an IPO has already submitted Rs1,300 crore prospectus for the same with SEBI

Belstar Microfinance offers a wide range of loan products, such as micro-enterprise, small enterprise, consumer goods, festival, education and emergency loans.