RBI Slaps INR 1.67 Crore Fine On Ola Financial Services

The Reserve Bank of India (RBI) has imposed fine of INR 1.67 crore on Ola Financial Services Private Limited for non-compliance with certain provisions of the Master Directions on Prepaid Payment Instruments (PPIs) and the Master Direction – Know Your Customer (KYC) Direction.

“The Reserve Bank of India (RBI) has imposed monetary penalty of INR 1,67,80,000 on Ola Financial Services Private Limited (the entity) for non-compliance with certain provisions of the Master Directions on PPIs dated August 27, 2021 (as updated from time to time) and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time),” RBI said in a statement.

The penalty has been imposed in exercise of powers vested in RBI under 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 entity with its customers.

“It was observed that the entity was non-compliant with the directions issued by RBI on KYC requirements. Accordingly, notice was issued to the entity 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, RBI concluded that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty,” the apex bank stated.

Earlier, The RBI had imposed hefty penalties on Kotak Mahindra Bank and IndusInd Bank for failing to comply with various regulations.

The Central bank had fined INR 1.5 crore on Kotak Mahindra Bank Limited for non-compliance with directions on ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’, and ‘Loans and Advances – Statutory and Other Restrictions.’

IndusInd Bank was fined INR 1 crore for not following KYC directions. A statutory inspection of the bank with reference to its financial position as on March 31, 2020 revealed that the bank had failed to adhere to the customer due diligence procedure in the accounts opened using one time password (OTP)-based e-KYC, in the non-face-to-face mode. In some accounts, the aggregate of all credits in a financial year, in all the deposits taken together, exceeded INR two lakh, and some fixed deposit accounts were opened for amounts exceeding INR one lakh, of which some deposits were for more than INR two lakh.

The bank had also fined three more state banks including Nav Jeevan Co-operative Bank Ltd, Ulhasnagar, Balangir District Central Cooperative Bank Limited, Odisha, and Dhakuria Cooperative Bank Ltd, West Bengal.

Nav Jeevan Co-operative Bank Ltd has been fined two lakh for non-compliance with the directions issued by RBI on exposure norms and statutory and other restrictions - UCBs.

The RBI had imposed a monetary penalty of INR 1.00 lakh on Balangir District Central Cooperative Bank Limited for non-adherence with the provisions of Section 9 of the Banking Regulation Act, 1949 and the directions issued by RBI in this regard (Disposal of Non-banking Assets).

A fine of INR two lakh has been imposed on Dhakuria Cooperative Bank Limited, Kolkata, West Bengal for non-adherence with the directions issued on ‘Exposure Norms and Statutory and Other Restrictions – UCBs’ and KYC Direction.