RBI Imposes ₹2.7 Lakh Penalty on Manappuram Finance for KMP Pay Rule Violation

Reserve Bank of India has imposed a monetary penalty of ₹2.70 lakh on Manappuram Finance Limited for non-compliance with regulatory guidelines related to the compensation structure of key managerial personnel. The penalty was imposed through an order dated March 9, 2026.

The action has been taken under the powers granted to the central bank under the Reserve Bank of India Act, 1934. According to the regulator, the penalty relates specifically to the company’s failure to comply with RBI’s directions on the deferral of variable pay for key managerial personnel.

Findings From RBI Inspection

The issue came to light following a statutory inspection conducted by the RBI with reference to the company’s financial position as of March 31, 2025. During the supervisory review, the regulator observed certain deficiencies in compliance with the prescribed compensation guidelines.

Based on these findings, the RBI issued a notice to the company asking it to explain why a monetary penalty should not be imposed for the identified violations. The company responded to the notice and also presented oral submissions during a personal hearing conducted by the regulator.

After reviewing the responses and examining the supervisory findings, the RBI concluded that the company had not adhered to the required norms concerning the payment of variable compensation to certain key managerial personnel.

Violation of Variable Pay Deferral Guidelines

According to the RBI, Manappuram Finance had paid the entire variable compensation upfront to some of its key managerial personnel without deferring a portion of the payment, as required under the regulatory guidelines.

The deferral mechanism is intended to align executive compensation with long-term risk management and corporate governance practices. By ensuring that a part of the variable pay is deferred, the guidelines aim to promote responsible financial management and accountability within financial institutions.

Manappuram Finance Share Price Today

On March 16, 2026, Manappuram Finance share price opened at ₹253.85. At 10:51 AM, the share price of Manappuram Finance was trading at ₹251.55, down by 1.78% on the NSE.

Also Read: Manappuram Finance - RBI Clears Bain Capital Stake Acquisition!

Conclusion

The RBI clarified that the monetary penalty is based solely on regulatory compliance deficiencies and does not question the validity of any transactions or agreements entered into by the company with its customers. The central bank also noted that the penalty does not prevent it from taking any further regulatory action if deemed necessary in the future.

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