Published 11:34 IST, July 27th 2024
RBI fines 3 payment system operators including Visa for unauthorised payment method
Compounding orders were issued to Ola Financial Services and Visa Worldwide for contravening specific provisions.
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RBI fines for deficiencies: The Reserve Bank of India (RBI) has imposed penalties on Visa Worldwide, Ola Financial Services, and Manappuram Finance for regulatory compliance deficiencies. Visa Worldwide Pte Limited has been fined Rs 2.4 crore for using an unauthorised payment transfer method, the central bank has said.
Besides, Manappuram Finance Limited has been fined Rs 41.5 lakh, and Ola Financial Services has been penalised Rs 87.55 lakh in two separate cases. The RBI has said that the penalties on Payment System Operators (PSOs) Manappuram Finance and Ola Financial Services were due to non-compliance with certain Know Your Customer (KYC) directives.
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The RBI stated, "It was observed that the entity (Visa) had implemented a payment authentication solution without regulatory clearance from RBI," without providing further details on the violation. In response, a Visa spokesperson said, "We duly acknowledge the RBI order and remain committed to following RBI guidelines and regulations to continue providing safe and secure payment solutions in India."
Compounding orders
Additionally, compounding orders were issued to Ola Financial Services and Visa Worldwide for contravening specific provisions. The RBI observed that Visa Worldwide Pte Limited had implemented a payment authentication solution without regulatory clearance, prompting a notice advising the company to show cause for the non-compliance.
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Visa Worldwide responded with an application for compounding the violation. After reviewing the application and oral submissions during a personal hearing, the RBI decided that the contravention could be compounded.
Manappuram Finance Limited and Ola Financial Services were found non-compliant with the RBI's KYC requirements, leading to penalties after consideration of their written responses and oral submissions. In February, the RBI had instructed Visa to halt the use of an unauthorized route for certain commercial payments, according to a Reuters report.
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This action is part of the RBI's ongoing efforts to tighten scrutiny of the processes followed by financial technology, or fintech, companies.
( With agency inputs)
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11:34 IST, July 27th 2024