RBI Penalty on Paytm Payments Bank, Western Union: What This Means for Customers

Paytm Payments Bank RBI Update: Reserve Bank of India has mentioned, the action "is not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers," the IANS reported.

New Delhi: Paytm Payments Bank Ltd (PPBL) and Western Union Financial Services Inc (WUFSI) have been slapped with monetary penalties by Reserve Bank of India (RBI) over deficiencies in regulatory compliance. Earlier this week, RBI had imposed a monetary penalty of Rs 1 crore on the State Bank of India (SBI).

Paytm Payments Bank RBI Penalty

• RBI imposed a Rs 1 crore monetary penalty on Paytm Payments Bank for an offence committed under the Payment and Settlement Systems Act, 2007. The central bank has said “This action is based on deficiencies in regulatory compliance,” as per the IANS report.
• However, RBI has mentioned, the action “is not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers,” the IANS reported.
• According to the central bank, on examination of the PPBL’s application for issue of final ‘Certificate of Authorisation’ (CoA), it was observed that the submitted information did not reflect the “factual position”.

Western Union RBI Update

RBI has imposed a monetary penalty of over Rs 27 lakh on the WUFSI for non-compliance with certain provisions of the directions contained in the ‘Master Direction on Money Transfer Service Scheme’ (MTSS Directions), as per the IANS report.

“WUFSI 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,” IANS reported quioting RBI statement.

“The RBI 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 IANS report says.