Paytm Payments Bank, Western Union fined Rs1 crore by RBI

Mumbai: The Reserve Bank has imposed a penalty of Rs 1 crore on Paytm Payments Bank Limited (PPBL) and Rs 27.78 lakh on Western Union Financial Services for non-compliance with certain directions.

In a release on Wednesday, the RBI said on examination of PPBL's application for issue of final Certificate of Authorisation (CoA), it was observed that it had submitted information which did not reflect the factual position.

"As this was an offence of the nature referred to in Section 26 (2) of the Payment and Settlement Systems Act, 2007, 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," it said.

Thereafter, the central bank by an order on October 1 imposed a monetary penalty of Rs 1 crore on PPBL.

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 determined that the ... non-compliance warranted the imposition of a monetary penalty after analysing 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.