RBI slaps Rs 3.06 crore penalty on Amazon Pay (India)

The central bank had issued a notice to Amazon Pay (India) advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.

The Reserve Bank of India (RBI) has imposed monetary penalty of Rs 3,06,66,000 on Amazon Pay (India) Private Limited (the entity) for non-compliance with certain provisions related to Prepaid Payment Instruments (PPIs) and Know Your Customer (KYC) direction.

"The RBI fined Amazon for non-compliance with certain provisions of the Master Directions on Prepaid Payment Instruments (PPIs) dated August 27, 2021 (as updated from time to time) and the Master Direction - Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time)," the central bank said in a statement.

"The penalty has been imposed in exercise of powers vested in RBI under 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 entity with its customers," the statement said.

The central bank had issued a notice to Amazon Pay (India) advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.

It was observed that the entity was non-compliant with the directions issued by RBI on KYC requirements. Accordingly, 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.

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.

What is Amazon Pay

Amazon Pay is one of the leading online payment processing systems which is managed by Amazon. It was started in the year 2007, the Amazon Pay uses the consumer base of Amazon.com and focuses on providing the users with an option to pay with their Amazon accounts on external merchant websites.

Currently, customers can opt to make their payments method by either choosing debit or credit card or through net banking or via Amazon Pay Balance.

The Amazon Pay provides an option for purchases to buy goods and services from web portals and mobile apps using the addresses and payment methods that are stored in the Amazon account which included debit and credit cards.