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The RBI has imposed a monetary penalty of ₹1 crore on Paytm Payments Bank (PPBL) and ₹27.78 lakh on Western Union Financial Services Inc (WUFSI).
RBI said the monetary penalty on PPBL has been imposed for an offence under the Payment and Settlement Systems Act, 2007 (PSS Act).
Non-compliance
The penalty on WUFSI, a money transfer service – cross-border in-bound service (customer-to-customer only) operator – has been imposed for non-compliance with certain provisions of RBI’s directions contained in its Master Direction on Money Transfer Service Scheme (MTSS Directions), according to a central bank statement.
Referring to an examination of PPBL’s application for issue of final Certificate of Authorisation (CoA), the RBI said it was observed that PPBL had submitted information which did not reflect the factual position.
The central bank observed that: “As this was an offence of the nature referred to in Section 26 (2) of the PSS Act, a notice was issued to 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.”
In the case of WUFSI, RBI noted that it 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 central bank 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 RBI said its 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 PPBL and WUFSI with their customers.