The Reserve Bank of India has imposed a penalty of Rs 4.15 crore on Manappuram Finance Limited for failing to comply with Know Your Customer (KYC) guidelines. These lapses specifically relate to the company’s obligations as a payment system operator. The RBI had earlier fined Ola Financial Services Ltd Rs 3.34 crore and Visa Worldwide Ltd Rs 24 crore for regulatory violations.
According to the central bank, Visa Worldwide implemented the payment authentication system without prior approval of the RBI. However, after issuing notice and considering Visa’s response, including filing for merger of the violations, the RBI held that it could merge the violations. Manappuram Finance and Ola Financial Services were found to have violated the KYC directive.
The step was taken after Manappuram Finance uncovered a possible Rs 200 crore fraud committed by employees of its subsidiary, Manappuram Comptech and Consultants Ltd. In response to the subsidiary’s fraudulent activities, Manappuram Finance had filed a complaint at Varappad Police Station and approached KPMG for a thorough investigation.
Manappuram Finance has assured stakeholders that the case has not had any quantifiable impact on the company’s overall financial position beyond the penalty amount.
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