RBI imposes monetary penalty of Rs 1 crore penalty on Paytm Payments Bank
New Delhi, Oct 21: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1 crore on Paytm Payments Bank and Rs 27.78 lakh on Western Union Financial Services for deficiencies in regulatory compliance, according to the central bank, is an offence under Section 26 (2) of the Payments and Settlement Act.
A statement issued by the RBI today read, "The Reserve Bank of India (RBI) had, by an order dated October 01, 2021, imposed a monetary penalty of Rs1 crore (Rupees one crore only) on Paytm Payments Bank Limited (PPBL), for an offence committed of the nature referred to in Section 26 (2) of Payment and Settlement Systems Act, 2007 (PSS Act)."
It further said, "A Compounding Order dated October 7, 2021, was also issued to Western Union Financial Services Inc (WUFSI), a Money Transfer Service - cross-border inbound service (customer to customer only) operator - imposing a penalty of ₹27,78,750 for non-compliance with certain provisions of the directions contained in the Master Direction on Money Transfer Service Scheme (MTSS Directions) dated February 22, 2017."
Thereafter, the central bank by an order on October 1 imposed a monetary penalty of Rs 1 crore on PPBL.
As regards Western Union Financial Services, the RBI said the company had reported instances of breach of the ceiling of 30 remittances per beneficiary during 2019 and 2020 and filed an application for compounding of the violation.
"RBI has determined that the non-compliance warranted the imposition of a monetary penalty after analyzing the compounding application, and oral submissions made during the personal hearing," it said.
The RBI, however, added 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 the entities with their customers.