RBI imposes monetary penalty on Kosamattam Finance Limited

Case Brief

By an order dated October 25, 2023, RBI imposed a monetary penalty of ₹13.38 lakh on Kosamattam Finance Limited, Kottayam. The penalty was imposed after inspection findings showed non-compliance with RBI’s NBFC Directions: the company did not submit credit information for gold loan accounts to Credit Information Companies and did not maintain the prescribed 75% LTV ratio in certain loan accounts during FY 2021-22. RBI issued a show-cause notice, reviewed the company’s reply and submissions, and held the contraventions substantiated. The action was taken under Section 25(1)(iii) read with Section 23(4) of the CIC (R) Act and Section 58G(1)(b) read with Section 58B(5)(aa) of the RBI Act, 1934.