Why RBI Imposes Monetary Penalty On Three Payment System Operators? Know Reason Here

New Delhi: The Reserve Bank of India (RBI) has imposed monetary penalties on three Payment System Operators (PSOs) for failing to comply with KYC (Know Your Customer) requirements. These Payment System Operators include Manappuram Finance, Ola Financial Services, and Visa Worldwide. The central bank has fined Rs 41.50 lakh for Manappuram Finance, Ola Financial Services Pvt. Ltd. Rs 87.55 lakh, and Visa Worldwide Pte. Limited Rs 2.4 crore.

The RBI’s action on KYC non-compliance highlights the regulator's vigilance regarding lapses in these procedures. The central bank issued notices to the entities, requesting them to explain why penalties should not be imposed for their non-compliance. 

Adding further, compounding orders were issued to Ola Financial Services and Visa Worldwide for violating certain provisions. The RBI stated that the penalties on Manappuram Finance and Ola Financial Services were specifically for non-compliance with KYC directions.

"Ola Financial Services Pvt. Ltd. had reported instances of shortfalls in the balance in its escrow account and filed an application for compounding the violation," the RBI said in a statement. According to the RBI statement, "The above actions have been taken in the exercise of powers vested in the RBI under the provisions of Section 30 and Section 31 of the Payment and Settlement Systems Act, 2007, and are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers."

"Visa respects and abides by the compliance guidelines, regulations, and local laws across the countries we operate in. We duly acknowledge the RBI order and remain committed to following RBI guidelines and regulations to continue providing safe and secure payment solutions in India," a Visa spokesperson said in a statement. (With Inputs From PTI)