The Reserve Bank of India (RBI) has taken a big step by adopting a tough stance against the country’s leading financial companies. The central bank has imposed a fine of lakhs of rupees on 6 non-banking financial companies (NBFCs) that violated the rules. Big companies like Muthoot Finance are also included in this list. This action of RBI has created a stir in the financial world, but investors and customers have only one question in their minds – are their money safe with this decision?
Which companies were hit?
According to the notification issued by RBI, these 6 companies have been fined for ignoring the rules:
- Avail Financial Services: Rs 6.20 lakh
- Muthoot Finance: Rs 5.80 lakh
- Satya Microcapital: Rs 3.10 lakh
- PAN Emami Cosmed: Rs 3.10 lakh
- Dhani Loans and Services: Rs 2.70 lakh
- Muthoot Vehicle & Asset Finance: Rs 2.70 lakh
Where did the companies make mistakes?
RBI has highlighted various mistakes of these companies. The fine was imposed on Muthoot Finance because the company failed to periodically review the risks associated with customer accounts. Additionally, the company’s software system was not robust enough to correctly identify suspicious transactions. At the same time, Avail Financial is accused that its managing director was also a director in another NBFC and the company distributed loans more than the prescribed limit. Apart from this, Satya Microcapital is accused of not declaring loan accounts as NPA on time and Pan Amami is accused of giving loans to group companies in excess of the limit.
Do customers need to panic?
If you are also a customer of these companies, then do not worry at all. RBI has clarified that this penalty has been imposed only due to minor technical lapses in following the rules. This will not have any impact on customers’ money, their deposits or any transactions. Experts believe that RBI keeps conducting such audits from time to time so that the financial system remains transparent and secure. These steps help companies learn to work better in the future, which ultimately protects the interests of customers.
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