PhonePe Fined Rs21 Lakh by RBI over Escrow Account Shortfall
Moneylife Digital Team 15 September 2025
Reserve Bank of India (RBI) has imposed a penalty of Rs21 lakh on PhonePe Ltd, formerly known as PhonePe Pvt Ltd, for non-compliance with directions issued by RBI on prepaid payment instruments (PPIs).
 
RBI’s statutory inspection of PhonePe, covering its operations from October 2023 to December 2024, found that on certain days, the end-of-day balance in the company’s escrow account was lower than the value of outstanding PPIs and payments due to merchants. Moreover, the company failed to report this shortfall to RBI immediately.
 
After considering the facts of the case and PhonePe reply, RBI concluded that the violations were substantiated and warranted the imposition of a penalty.
 
RBI says its action is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by PhonePe with its customers.
Comments
Free Helpline
Legal Credit
Feedback