RBI Imposes Monetary Penalty On 5 Payment System Operators: Check Report

According to the press release issued on 27th August 2021, five payment system operators have been penalised by the Reserve Bank of India (RBI) for violating or failing to comply with various aspects of the guidelines. The press report has mentioned that "The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3 crore (Rupees three crore only) on Transaction Analysts (India) Pvt. Ltd. for contravention of / non-compliance with certain provisions of the directions issued by RBI."

RBI said in its press report that "Monetary penalty has also been imposed on four White Label ATM (WLA) Operators as detailed below, for contravention of / non-compliance with certain provisions of the directions contained in the 'White Label ATMs in India - Guidelines' dated June 20, 2012."

Sr No.	Name of the entity	Speaking Order dated	Amount of Penalty (Rs Cr)
1	BTI Payments Pvt. Ltd.	13-08-2021	2
2	Hitachi Payment Services Pvt. Ltd.	13-08-2021	2
3	Tata Communications Payment Solutions Ltd.	13-08-2021	1
4	Vakrangee Ltd.	13-08-2021	1
Source: RBI

"The penalties have been imposed in exercise of powers vested in RBI under the provisions of Section 30 of the Payment and Settlement Systems Act, 2007. This 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 the entities with their customers," confirmed RBI in its media statement.

According to RBI "On-site inspection of Transaction Analysts (India) Pvt. Ltd. revealed, inter-alia, non-compliance with directions issued by the RBI on escrow account balances, limits prescribed for certain transactions, and KYC. Off-site review of the operations of the WLA Operators had revealed non-compliance with directions issued by the RBI on ATM deployment and maintenance of net-worth. Accordingly, notices were issued to the entities. After considering the written responses and oral submissions made in the personal hearings, RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty."

On the other side "The Reserve Bank of India (RBI) has, by an order dated August 26, 2021, imposed a monetary penalty of Rs 25 lakh (Rupees twenty-five lakh only) on New India Co-operative Bank Ltd., Mumbai, Maharashtra (the bank) for non-compliance with directions issued by RBI contained in the circular on 'Frauds in UCBs: Changes in monitoring and reporting mechanism' dated May 19, 2016. This penalty has been imposed in exercise of powers vested in RBI under section 47 A (1) (c) read with sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949. This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," according to the media report of the central bank issued on August 27, 2021.

RBI has also "imposed a monetary penalty of Rs 20 lakh (Rupees twenty lakh only) on The Jalgaon People's Co-operative Bank Ltd., Jalgaon, Maharashtra (the bank) for non-compliance with direction issued by RBI on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)'. This penalty has been imposed in exercise of powers vested in RBI under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949," according to the order issued on August 26, 2021.

Source: RBI