Paytm Payments Bank slapped with Rs 5.39 crore penalty from RBI

13 Oct 2023 , 10:12 AM

The Reserve Bank of India announced on Thursday that it has fined Paytm Payments Bank Ltd Rs 5.39 crore for failing to comply with certain laws, including Know Your Customer (KYC) norms.

RBI also found non-compliance with various rules related to ‘RBI Guidelines for Licencing of Payments Banks’, ‘Cyber security framework in banks’, and ‘Securing mobile banking applications including UPI ecosystem’.

According to an official statement, the bank was subjected to a special inspection from the perspective of KYC/AML (Anti Money Laundering) and a complete system audit by auditors identified 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 payout services.

It was also determined that the bank did not monitor payout transactions or conduct risk profiles of firms using payout services, according to the RBI.

According to the RBI, Paytm Payments Bank exceeded the regulatory end-of-day balance limit in certain customer advance accounts that used payout services.

The bank was served with a notice ordering it to explain why it failed to follow the guidelines and why a penalty should not be imposed.

 

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