RBI imposes Rs 5.39 crore penalty on Paytm Payments Bank
13 Oct 2023 13:59:26
New Delhi, Oct 13: The Reserve Bank of India (RBI) said on Thursday that it has fined Paytm Payments Bank Ltd Rs 5.39 crore for failing to comply with various laws, including Know Your Customer (KYC) norms.
The central bank also identified non-compliance with several rules connected to 'RBI Guidelines for Licensing of Payments Banks', 'Cyber security framework in banks' and 'Securing mobile banking apps including UPI ecosystem'.
According to an official statement, the bank was subjected to a particular inspection from the standpoint of KYC/AML (Anti Money Laundering) and a complete system audit by auditors selected by the RBI.
Following an analysis of the reports, the RBI stated in a statement that Paytm Payments Bank failed to identify the beneficial owner of firms onboarded for providing payment services.
It was also determined that the bank did not monitor payment transactions or conduct risk profile of firms using payout services, according to the RBI.
Furthermore, the central bank stated that Paytm Payments Bank exceeded the regulation end-of-day balance limit in some customer advance accounts with payment services.
The bank was served with a notice requiring it to show cause why a penalty should not be imposed for failing to comply with the orders.
"After considering the bank's reply to the notice and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank," the bank said in a statement.
Furthermore, the RBI stated that the penalty is based on regulatory compliance inadequacies and is not meant to rule on the legitimacy of any transaction or arrangement entered into by the bank with its clients.
Meanwhile, the central bank has slapped a Rs 4 lakh penalty on Annasaheb Magar Sahakari Bank, Pune, for violating certain regulations.