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RBI slaps ₹5.4 crore fine on Paytm Payments Bank over non-compliance of guidelines related to KYC, cybersecurity
RBI has imposed ₹5.39 crore of finre on Paytm Payments Bank for non compliance of its certain rules
The Reserve Bank of India imposed a fine of ₹5.39 crore on Paytm Payments Bank on Thursday. The fine was imposed on the non-compliance of certain provisions of RBI guidelines related to Know your customer (KYC), cybersecurity, etc.
According to RBI, Paytm failed to comply a provisions of RBI guidelines. Failure to report a cybersecurity incident on time is one of multiple incidents where RBI guidelines were not followed.
"Paytm Payments Bank was penalised for “non-compliance with certain provisions of the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’, ‘RBI Guidelines for Licensing of Payments Banks’ read with ‘Enhancement of maximum balance at end of the day’, ‘Cyber security framework in banks’ read with ‘Guidelines on reporting of unusual cyber security incidents’ and ‘Securing mobile banking applications including UPI ecosystem,” said RBI in its order dated October 10, 2023," said the company in its stock filing.
RBI also said that the action was taken on the basis of its analysis of deficiencies in regulatory compliance, examination of the special scrutiny report, comprehensive system audit report, and other documents. According to RBI, Paytm Payments Bank had failed to identify beneficial owners of entitieson-boarded by it for providing payout services.
The online payment bank failed to monitor payout transactions and carry out risk profiling of entities availing payout services, among others.
Last year, the RBI had restricted Paytm Payments Bank from taking on new customers and also ordered a comprehensive audit of its IT systems.
The company also failed to follow the regulatory ceiling of end of the day balance in certain customer advance accounts availing payout services. As per RBI's statement, Paytm failed to implement device binding control measure related to ‘SMS delivery receipt check’, and its V-CIP infrastructure failed to prevent connections from IP addresses outside India.
Prior to the imposition of penalty, RBI had also sent a notice asking “why penalty should not be imposed on Paytm for failure to comply with the said directions.” The decision to impose fine of ₹5 crore was taken after considering the company's reply to the notice.
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Business NewsCompaniesNewsRBI slaps ₹5.4 crore fine on Paytm Payments Bank over non-compliance of guidelines related to KYC, cybersecurity
First Published:12 Oct 2023, 05:09 PM IST
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