AMN / BIZ DESK
The Reserve Bank of India has imposed a monetary penalty of five crore and thirty-nine lakh rupees on Paytm Payments Bank Limited for violation of Know Your Customer (KYC) and a few other norms.
RBI said, the bank had also violated certain provisions of ‘RBI Guidelines for Licensing of Payments Banks’, ‘Guidelines on reporting of unusual cyber security incidents’ and ‘Securing mobile banking applications including UPI ecosystem’.
According to RBI, Paytm failed to comply a provisions of RBI guidelines. Failure to report a cybersecurity incident on time is one of multiple incidents where RBI guidelines were not followed.
RBI also said that the action was taken on the basis of its analysis of deficiencies in regulatory compliance, examination of the special scrutiny report, comprehensive system audit report, and other documents. According to RBI, Paytm Payments Bank had failed to identify beneficial owners of entitieson-boarded by it for providing payout services.
The online payment bank failed to monitor payout transactions and carry out risk profiling of entities availing payout services, among others.
Last year, the RBI had restricted Paytm Payments Bank from taking on new customers and also ordered a comprehensive audit of its IT systems.
The company also failed to follow the regulatory ceiling of end of the day balance in certain customer advance accounts availing payout services. As per RBI’s statement, Paytm failed to implement device binding control measure related to ‘SMS delivery receipt check’, and its V-CIP infrastructure failed to prevent connections from IP addresses outside India.