RBI Imposes Rs 3-Crore Penalty On Amazon Pay For Non-Compliance

Amazon Pay was penalised for non-compliance with certain provisions of the Master Directions on Prepaid Payment Instruments (PPIs) dated August 27, 2021 and the Master Direction – KYC Direction

The RBI has observed that Amazon Pay was non-compliant with the directions issued by central banking regulator on KYC requirements. ( Image Source :Getty )

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3.06 crore on Amazon Pay (India) Private Limited for non-compliance with certain norms. According to the statement by the RBI on Friday, it said the US e-commerce giant was penalised for non-compliance with certain provisions of the Master Directions on Prepaid Payment Instruments (PPIs) dated August 27, 2021 and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016.

According to the release by the central bank, the penalty has been imposed in exercise of powers vested in the RBI under Section 30 of the Payment and Settlement Systems Act, 2007.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers.

The RBI has observed that Amazon Pay was non-compliant with the directions issued by central banking regulator on KYC requirements. Accordingly, notice was issued to the entity advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.

After considering the entity’s response, RBI concluded that the aforesaid charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.

Meanwhile, the government last week also pulled up Amazon for its anti-consumer practices. Amazon's algorithms prioritise their private labels and of the companies it has investments in.

In another incident, the RBI on Thursday said it has cancelled the registration of Guwahati-based Rhino Finance Private Ltd for irregular lending practices.

In a release, it said the Certificate of Registration (CoR) of Rhino Finance has been cancelled on account of violation of RBI guidelines on outsourcing and Fair Practices Code in its digital lending operations undertaken through third party apps which was considered detrimental to public interest. "The company was also not complying with the extant regulations pertaining to charging of excessive interest and had resorted to undue harassment of customers for loan recovery purposes," the RBI said.