RBI imposes Rs 1 crore fine on Paytm Payments Bank

The Reserve Bank of India has imposed a monetary penalty worth Rs 1 crore on Paytm Payments Bank for violating its guidelines.

In a press statement, the central bank said that the fine is related to an offence committed of the nature referred to in Section 26 (2) of Payment and Settlement Systems Act, 2007 (PSS Act).

RBI said that while examining Paytm payments bank’s application for the issue of final Certificate of Authorisation, it was found that the information it had submitted 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, the RBI determined that the aforementioned charge was substantiated and warranted the imposition of a monetary penalty,” the statement from the central bank read.

Earlier this week,  RBI imposed a monetary penalty of Rs 1 crore on India's largest public lender State Bank of India (SBI) for non-compliance with the directions contained in "RBI (Frauds classification and reporting by commercial banks and select FIs directions 2016".

As per the central bank, the action was based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

The penalty was imposed in the exercise of powers vested in RBI under the provisions of section 47A (1) (c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.

Scrutiny was carried out by the RBI in a customer account maintained with the bank and the examination of the scrutiny report and all related correspondence pertaining to the same, revealed, inter alia, non-compliance with the aforesaid directions to the extent of delay in reporting of fraud in the said account to RBI.