According to a regulatory filing by IDBI Bank on Tuesday, a share purchase agreement with regard to sale of IDBI Mutual Fund to Muthoot Finance was signed on November 22, 2019. The Reserve Bank of India (RBI) has nixed Muthoot Finance Ltd’s plans to enter into the mutual fund business by rejecting the firm’s proposal to acquire IDBI Asset Management Ltd and IDBI MF Trustee Company Ltd. RBI rejects Muthoot Finance's proposal to buy IDBI MF 1 min read. Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device. The RBI had issued a show cause notice, heard the company out and decided to levy the penalty. Haqikat kya hai : who is infiltrating the farmers agitation ? The Reserve Bank of India (RBI) on Thursday imposed penalties of Rs 10 lakh and Rs 5 lakh on Muthoot Finance and Manappuram Finance respectively, for norm violations. Please Subscribe to get access to one of our early bird packs. Or click on Free Trial to get 14 days free trial. The RBI said sponsoring a mutual fund is not in consonance with the activity of an operating non-banking finance company IDBI Bank had entered into a share purchase agreement with regard to the sale of IDBI Mutual Fund to Muthoot Finance on November 22, 2019. Total income stood at Rs.1062 crs and at Rs.2154crs respectively. The Reserve Bank of India (RBI) has rejected the proposed acquisition of IDBI Mutual Fund by Muthoot Finance. The regulator told the Gold Loan Company that the activity of sponsoring mutual funds or operating an asset management company is not commensurate […] The Reserve Bank of India (RBI) has imposed a penalty of ₹10 lakh on Muthoot Finance Ltd, Ernakulam, and ₹5 lakh on Manappuram Finance Ltd, Thrissur, for non-compliance with its directions. Muthoot Finance Ltd. is an Indian financial corporation and the largest gold loan NBFC in the country. Customize your preference and get a personalized recommendation of stories based on your interest. “After considering the company’s reply to the notice, oral submissions made during the personal hearings and examination of additional submissions made by it, RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty,” the statement said. Increase in LTV has further put banks in a sweet spot. "The agreement was entered into by and between Muthoot Finance, IDBI Bank, IDBI Capital Markets & Securities, IDBI Asset Management and IDBI MF Trustee Company... for acquisition by Muthoot Finance of 100% equity shares of IDBI Asset Management held by IDBI Bank and its nominees and IDBI Capital Markets & Securities, and 100 % equity shares of IDBI MF Trustee Company held by IDBI Bank and its nominees," it said. In the case of Muthoot Finance, RBI said the penalty is for non-compliance with directions on maintenance of Loan to Value (LTV) ratio in gold loans and on obtaining copy of PAN (Permanent Account Number) card of the borrower while granting loans in excess of ₹5 lakh. . RBI turns down proposal of Muthoot Finance to acquire IDBI Bank's mutual fund business. The RBI said Muthoot Fincorp had been collecting deposits for Muthoot Estate Investments, a group company, via its branches, from which Muthoot Fincorp has now been barred. Depression rates tripled during Covid-19 pandemic: Study. Muthoot Finance has said Reserve Bank of India didn't accede to its proposed acquisition of IDBI Mutual Fund. All rights reserved. RBI imposition of 10 and 5 Lakh fine on Muthoot Finance and Manappuram respectively comes after flagrant and continuous violation of RBI guidelines in following protocol You have clicked on a link which leaves THBL website, and you will be redirected to a third party website.THBL makes no representations nor has any supervision or control over the content, reliability or security of the third party website, nor shall THBL be liable for its use. Muthoot Finance had proposed to purchase 100 equity shares of IDBI AMC and IDBI MF Trustee Company held by the sellers for a total consideration of Rs 215 crore. MUMBAI : The Reserve Bank of India (RBI) has not cleared a proposal by Muthoot Finance Ltd to buy IDBI Asset Management Ltd and IDBI MF Trustee … Photo Credit: Reuters. Industry, '' said George Alexander Muthoot, MD, Muthoot Finance 4... An Indian financial Corporation and the Richest Malayalee in India by Forbes Asia Magazine, 2020 of... 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