Manappuram Finance sinks 2 percent as RBI imposes Rs 43 lakh fine

Manappuram Finance was trading almost 3 percent lower in the morning session on November 17 after the Reserve Bank of India slapped a fine of Rs 42.78 lakh on the NBFC.

Manappuram Finance is also one of the many financial companies hit by the RBI’s tightening of consumer lending norms, as the banking regulator increased the risk weight by 25 percentage points on consumer credit exposure of commercial banks and non-banking finance companies.

Manappuram Finance was fined for non-compliance of certain provisions of the “Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016,”, the central bank said/

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The RBI examined the company’s risk assessment report, inspection report, supervisory letter and all related correspondence. The examination revealed the company’s failure to comply with the RBI’s directions on payment to certain borrowers the surplus amounts realised by auction of gold articles pledged by those borrowers, it said.

Following this, the RBI issued Manappuram Finance a notice asking for clarification and why the penalty should not be imposed for failure to comply. Unsatisfied with the company’s response and the RBI imposed the penalty was warranted.

At 11.32 am, Manappuram Finance was trading at Rs 156.30 on the National Stock Exchange, down 2.62 percent from the previous closing price.

Also Read | Axis Bank shares fall 2% after RBI raises risk-weight on consumer loans, imposes penalty

This year, Manappuram Finance has gained 32.05 percent, while the Nifty has risen 8.78 during the period.

In the September quarter, the NBFC posted a year-on-year growth of over 36 percent in its consolidated net profit at Rs 560.65 crore.

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