Paytm Payments Bank was fined Rs 5,39 crore by the Reserve Bank of India for not complying with KYC regulations.
In a release on October 12th, the central bank stated that it took the action due to non-compliance of certain provisions of the Reserve Bank of India’s (Know Your Customer) Directions (2016), RBI Guidelines for Licensing of Payments Banks read with “Enhancement of Maximum Balance at the End of the Day”, “Cyber Security Framework in Banks” read with “Guidelines for reporting of unusual cybersecurity incidents”, and securing mobile banking apps including UPI ecosystem.
The RBI stated in a statement that “this penalty was imposed as a result of the powers conferred to it by Section 47A(1) (c) and Section 46(4) (i) of Banking Regulation Act 1949.”
The RBI stated that the action was taken due to deficiencies in regulatory compliance, and not because it is intended to judge the validity of any agreement or transaction entered into between the bank and its customers.
In the press release, RBI said that a special KYC/AML audit was performed by the bank and a system audit was carried out by the auditors selected by RBI.
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