The Reserve Financial institution of India (RBI) on Thursday stated it has imposed a penalty of Rs 5.39 crore on Paytm Funds Financial institution Ltd for non-compliance with sure provisions, together with Know Your Buyer (KYC) norms. The central financial institution additionally discovered non-compliance with sure provisions associated to ‘RBI Pointers for Licensing of Funds Banks’, ‘Cyber safety framework in banks’ and ‘Securing cell banking functions together with UPI ecosystem’.
A particular scrutiny from KYC/AML (Anti Cash Laundering) perspective of the financial institution was performed and a complete system audit of the financial institution was performed by auditors recognized by RBI, in keeping with an official assertion. After examination of the reviews, RBI within the assertion stated it discovered that Paytm Funds Financial institution didn’t establish helpful proprietor in respect of entities onboarded for offering payout providers.
It was additionally revealed that the financial institution didn’t monitor payout transactions and perform threat profiling of entities availing payout providers, RBI added. Additional, the central financial institution stated Paytm Funds Financial institution breached the regulatory ceiling of finish of the day stability in sure buyer advance accounts availing payout providers.
A discover was issued to the financial institution advising it to indicate trigger as to why penalty shouldn’t be imposed on it for failure to adjust to the instructions.
“After contemplating the financial institution’s reply to the discover and oral submissions made throughout the private listening to, RBI got here to the conclusion that the cost of non-compliance with the aforesaid RBI instructions was substantiated and warranted imposition of financial penalty on the financial institution,” the assertion stated.
The RBI stated the penalty is predicated on the deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its prospects. In the meantime, the central financial institution has additionally imposed a penalty of Rs 4 lakh on Annasaheb Magar Sahakari Financial institution, Pune, for contravention with sure provisions.