The Reserve Bank of India (RBI) has imposed monetary penalties on two payment system operators – Paytm Payments Bank Ltd (PPBL) and Western Union Financial Services Inc (WUFSI) – as deficiencies were found in regulatory compliance.
The RBI imposed a Rs 1 crore monetary penalty on Paytm Payments Bank for an offence committed under the Payment and Settlement Systems Act, 2007.
"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers."RBI said in a statement.
According to the central bank, on examination of the PPBL's application for issue of final 'Certificate of Authorisation' (CoA), it was observed that the submitted information 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 the 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 RBI stated.
Besides, the RBI has imposed a monetary penalty of over Rs 27 lakh on the WUFSI for non-compliance with certain provisions of the directions contained in the 'Master Direction on Money Transfer Service Scheme' (MTSS Directions).
"WUFSI had reported instances of breach of the ceiling of 30 remittances per beneficiary during the calendar years 2019 and 2020, and filed an application for compounding of the violation... The RBI determined that the aforementioned non-compliance warranted the imposition of a monetary penalty after analysing the compounding application, and oral submissions made during the personal hearing," the central bank stated.
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