RBI Imposes Penalty Totalling Rs9 Crore on 5 Payment System Operators
Moneylife Digital Team 28 August 2021
The Reserve Bank of India (RBI) has imposed a penalty totalling Rs9 crore on five payment system operators, citing non-compliance with its norms on prescribed transaction limits and ATM deployment.
 
The RBI has imposed a penalty of Rs3 crore on Transaction Analysts (India) for non-compliance with its provisions related to escrow account balances, limits prescribed for certain transactions and know-your-customer (KYC).
 
Besides Transaction Analysts (India), the banking regulator has also imposed monetary penalties on four white label automatic teller machine (ATM) operators – Tata Communications Payment Solutions, Hitachi Payment Services, Vakrangee and BTI Payments citing non-compliance with RBI’s directions on ATM deployment and maintenance of net-worth.
 
The apex bank discovered non-compliance with the RBI directions and approved monetary penalties on these entities after considering their written replies and oral submissions in personal hearings. Both Hitachi Payment Services and BTI Payments have been slapped with a fine of Rs2 crore each. On the other hand, Tata Communications Payment Solutions and Vakrangee have to pay a penalty of Rs1 crore each.
 
The RBI has imposed these penalties under section 30 of the Payment and Settlement Systems Act, 2007. “The penalties have been imposed in exercise of powers vested in RBI under the provisions of Section 30 of 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,” the banking regulator said in its official press release.
 
Separately, the RBI has also imposed penalties on two co-operative banks and a non-banking financial company (NBFC), for deficiencies in certain regulatory compliance. 
 
A penalty of Rs3 lakh has been imposed on Pune-based Jijamata Mahila Sahakari Bank for non-compliance with the directions on exposure norms, statutory and other restrictions-urban co-operative banks (UCBs), the RBI said.
 
In another statement, the apex bank said a penalty of Rs2 lakh has been imposed on Pune-based The Muslim Co-operative Bank Ltd for contravention of non-compliance with RBI directions KYC.
 
The banking regulator also said it has imposed a penalty of Rs5 lakh on Tirunelveli (Tamil Nadu)-based Seyad Shariat Finance Ltd, an NBFC, for non-compliance with certain provisions of the KYC Directions, 2016.
 
In all three cases, the central bank said that the penalties are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by their customers.
 
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