Document title: RBI imposes monetary penalty on Muthoot MCred Limited
Issuing authority: Reserve Bank of India (RBI)
Reference number: Press Release 2026-2027/895
Date: 14 August 2026
Regulatory and Policy Measures
The RBI, exercising powers under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934, issued an order on 14 August 2026 imposing a monetary penalty of ₹3.10 lakh on Muthoot MCred Limited (formerly Muthoottu Mini Financiers Limited). The penalty arises from the company's failure to comply with RBI directions on asset classification. A statutory inspection was carried out with reference to the company's financial position as on 31 March 2025. Following the inspection, a show‑cause notice was issued, to which the company responded with written and oral submissions during a personal hearing. After consideration, the RBI sustained the charge that the company had upgraded certain loan accounts classified as non‑performing assets to “Standard” status without full repayment of the accrued interest and principal across all credit facilities. The RBI clarified that the penalty addresses regulatory compliance deficiencies and does not constitute a judgment on the validity of any customer transactions, and it is imposed without prejudice to any further action that may be taken.
Compliance Findings
The specific non‑compliance identified was the premature re‑classification of NPA loans to standard, contravening the asset‑classification guidelines issued by the RBI. The RBI’s findings were based on supervisory observations and related correspondence.
The order was signed by the Chief General Manager, Brij Raj.