RBI slaps ₹1.67 cr fine on Ola Financial Services for breach of norms

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.67 crore on Ola Financial Services Private Limited for non-compliance with certain provisions related to pre-paid payment instruments and Know Your Customer norms.

“The RBI has imposed a monetary penalty of ₹1,67,80,000 on Ola Financial Services Private Limited for non-compliance with certain provisions of the Master Directions on PPIs dated 27 August, 2021 and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016,” it said in a statement.

Ola Financial Services Private Limited, a subsidiary of ride-hailing app Ola, offers financial services such as lending for two-wheelers, four-wheelers, personal loans and insurance products.

The penalty has been imposed in exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007, the central bank said. 

"It was observed that the entity was non-compliant with the directions issued by RBI on KYC requirements," the central bank said.

A notice was issued to the entity advising it to show cause as to why penalty should not be imposed for non-compliance with the directions, the statement read.

"After considering the entity's response, RBI concluded that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty," the RBI said.

The penalty is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by Ola Financial Services with its customers, it further said.