Shares of Manappuram Finance were trading 4% lower on 17 November after the company was slapped with a fine worth Rs 42.78 lakh from the Reserve Bank of India (RBI).
The company is among the many financial companies hit by the RBI’s tightening of consumer lending norms, as the regulator increased the risk weight by 25% points on consumer credit exposure of non-banking finance companies and commercial banks.
The bank regulatory said, “Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.”
The RBI had examined the company’s risk assessment report, supervisory letter, inspection report and all related correspondence, which revealed the company’s failure to comply with the regulator’s directions on payment to certain borrowers.
After this, the bank regulator issued a notice to the company asking for clarification and explaining why the penalty should not be imposed for failure to comply. Dissatisfied with the response, the RBI imposed a penalty on the lender.
At 3:30 pm, the shares of Manappuram Finance closed 3.77% lower at Rs 154.45 on NSE.