RBI said that the penalty has been imposed in the exercise of powers vested in RBI under the provisions of 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.
RBI had noticed that the company was non-compliant with the directions issued on the maintenance of the escrow account balance. Accordingly, notice was issued to the entity advising it to show cause as to why a penalty should not be imposed for non-compliance with the directions.
After considering the entity’s written responses and oral submissions made during the personal hearings, RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted the imposition of monetary penalty.