RBI Slaps Penalties On Three Payment System Operators For Regulatory Violations
RBI Slaps Penalties On Three Payment System Operators For Regulatory Violations
The Reserve Bank of India (RBI) has imposed monetary penalties on three Payment System Operators (PSOs) for non-compliance with regulatory guidelines. The penalized entities include Manappuram Finance Limited, Ola Financial Services Pvt. Ltd., and Visa Worldwide Pte. Limited. According to a press release from the RBI, the penalties were levied for violations of the Master Direction – Know Your Customer (KYC) norms dated February 25, 2016, among other regulatory directives.
Manappuram Finance Limited has been fined ₹41.50 lakh, with the speaking order dated July 16, 2024. Ola Financial Services Pvt. Ltd. has been penalized ₹33.40 lakh, with their speaking order issued on the same date. The penalties highlight the importance of adhering to regulatory standards in the financial sector.
In addition to these penalties, the RBI issued compounding orders to Ola Financial Services Pvt. Ltd. and Visa Worldwide Pte. Limited for contraventions related to prepaid payment instruments and card-not-present transactions. Ola Financial Services Pvt. Ltd. received a compounding order on July 5, 2024, for ₹54.15 lakh. Visa Worldwide Pte. Limited’s compounding order, dated July 16, 2024, amounted to ₹240.75 lakh.
Both Manappuram Finance Limited and Ola Financial Services Pvt. Ltd. were found non-compliant with the KYC directions issued by the RBI. Notices were issued to these entities, advising them to show cause as to why penalties should not be imposed for non-compliance. After reviewing their written responses and oral submissions, the RBI concluded that the violations warranted monetary penalties.
In the case of Visa Worldwide Pte. Limited, it was observed that the entity had implemented a payment authentication solution without regulatory clearance from the RBI. The entity applied for compounding of the violation after receiving a notice. Following a personal hearing, the RBI determined that the contravention could be compounded.
These actions underscore the RBI’s commitment to enforcing compliance with regulatory standards to ensure the integrity and security of the financial system. The penalties serve as a reminder to all financial entities of the importance of adhering to established guidelines and maintaining transparency in their operations.
