The Reserve Bank of India (RBI) has imposed a fine of over Rs 17 lakh on non-banking finance company Manappuram Finance for violating KYC guidelines as well as norms related to prepaid payment instruments.
The penalty has been imposed in exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007, the regulator said in a release. The company has been fined Rs 17,63,965 for non-compliance with certain directions on issuance and operation of Prepaid Payment Instruments (PPIs) and Know Your Customer (KYC) norms, it said.
The RBI had sent notice to the company advising it to show cause as to why penalty should not be imposed for non-compliance with the directions. "After considering the entity's response and giving it a personal hearing, RBI concluded that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty," it said. 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 entity with its customers, the RBI added.