RBI Imposes Penalties On Paytm Payments Bank, Western Union Financial Services

The central bank imposed a monetary penalty of Rs 1 crore on Paytm Payments Bank Ltd and over Rs27 lakh fine on cross-border in-bound service operator Western Union Financial Services Inc

Reserve Bank of India. (File Photo)

New Delhi: After imposing a monetary penalty of Rs 1 crore on State Bank of India, the Reserve Bank of India (RBI) on Wednesday imposed the same amount of fine on the largest online payments company Paytm Payments Bank Limited (PPBL) over deficiencies in certain regulatory compliance.

During its examination of Paytm Payments Bank’s application for issue of final Certificate of Authorisation, the RBI noted that PPBL information that did not reflect the factual position.

“As this was an offence of the nature referred to in Section 26 (2) of the PSS Act, a notice was issued to PPBL. After reviewing the written responses and oral submissions made during the personal hearing, RBI determined that the aforementioned charge was substantiated and warranted the imposition of a monetary penalty," RBI added, according to Mint report.

What’s the case of Western Union Financial Services?

Moreover, the central bank also imposed a fine of over Rs27 lakh on cross-border in-bound service operator Western Union Financial Services Inc (WUFSI) ‘for non-compliance with certain provisions of the directions contained in the Master Direction on Money Transfer Service Scheme (MTSS Directions) dated February 22, 2017.'

“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 entities with their customers," RBI said in a statement, according to the publication.

According to the central bank, the company had reported cases of breach of the ceiling of 30 remittances per beneficiary during the calendar years 2019 and 2020, and filed an application for compounding of the violation.

 “RBI determined that the aforementioned non-compliance warranted the imposition of a monetary penalty after analysing the compounding application, and oral submissions made during the personal hearing," it said.