The Reserve Bank of India (RBI) has slapped a penalty of Rs 2.7 lakh on Muthoot FinCorp for non-compliance with certain norms on 'Internal Ombudsman'.

The central bank conducted a statutory inspection of Muthoot Finance with reference to its financial position as of 31 March 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 a penalty should not be imposed on it for its failure to comply with the 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 central bank said.

RBI said Muthoot FinCorp 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.

The central bank, however, said that the penalty 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, it added.