New Delhi: After almost five months of being barred from adding new customers, Fino Payments Bank, one of India’s first payments banks has been allowed to open new accounts by the Reserve Bank of India (RBI) after it submitted the compliance report to the central bank. Fino Payments Bank had been unable to enrol new customers since the end of May after RBI found the bank to be non-compliant with the operational guidelines laid down by it.
“RBI has lifted the prohibition on Fino Payments Bank to open new accounts," said a statement from the payments bank on Tuesday.
“It may be noted that RBI had prohibited Fino Payments Bank from opening any new accounts on account of violations of certain licensing conditions and operating guidelines. However, no restrictions were placed by RBI on the bank for servicing existing customers," the statement added.
In August, the payments bank had said that a few Fino Payments Bank accounts had deposits in excess of the stipulated amount.
According to RBI’s operating guidelines for payments banks, a customer can make deposits of up to ₹ 1 lakh per account in a year. Such banks cannot accept deposits beyond this limit.
The payments bank was asked to immediately stop enrolling new customers until it takes corrective actions.
Fino Payments Bank, which was a remittance service provider, received the RBI nod to operate as a bank in March 2017. It started operations in September after its launch in July last year. The bank currently has more than 400 banking outlets and over 50,000 access points.
Fino Payments Bank isn’t the only one. RBI had imposed similar restrictions on Paytm Payments Bank which is still not able to on-board new customers, said a report by Business Standard.
Paytm stopped enrolling new customers on 20 June following an audit by RBI, which made certain observations about the process the company follows in acquiring new customers and its adherence to know-your-customer (KYC) norms.
In January, RBI directed Airtel Payments Bank not to onboard new customers after it was found to be opening accounts without specific or clear consent from the customers. It was until early this month, that the payments bank received requisite approvals from RBI and the Unique Identification Authority of India (UIDAI) to start on-boarding customers using Aadhaar based e-KYC.
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Other payments banks that have started operations are India Post Payments Bank Ltd, Aditya Birla Idea Payments Bank and Jio Payments Bank.
A payments bank is a differentiated bank providing a limited range of products, such as acceptance of demand deposits and remittances of funds. These banks cannot issue loans and credit cards.