RBI bars Chennai-based First Leasing from doing business

Action follows inspection of books

Reserve Bank of India has barred A C Muthiah-headed First Leasing Company of India Ltd from doing any business until further orders following inspection of its books and records as on March 31, 2013.

RBI, however, did not elaborate on findings that prompted it to bar the company from doing business.

The Central bank has taken action under RBI act 1934 in interest of public interest, it said in statement.

RBI has restricted Chennai-based finance company from declaring or distributing dividend. It also restrained the company from creating any liabilities. The company cannot sell, transfer, create charge or mortgage or deal in its property or assets without RBI’s permission.

The company had posted a net profit of Rs 34.72 crore in 2012-13 on total income of Rs 234.66 crore. A C Muthiah is chairman of finance company, and Farouk M Irani is managing director of the outfit, according to the company website.