RBI Penalizes Visa, Ola Financial Services, and Manappuram Finance with Rs 3.7 Crore for Regulatory Non-Compliance

Delhi: The Reserve Bank of India (RBI) has imposed a cumulative penalty of approximately Rs 3.7 crore on prominent payment system operators Visa Worldwide, Ola Financial Services, and Manappuram Finance for failing to adhere to regulatory requirements.

The penalties are allocated as follows: Visa Worldwide Pte Limited has been fined Rs 2.4 crore, Manappuram Finance Limited Rs 41.5 lakh, and Ola Financial Services Rs 87.55 lakh, levied in two distinct cases.

The RBI highlighted that the fines imposed on Manappuram Finance and Ola Financial Services were primarily due to non-compliance with specific provisions of the Know Your Customer (KYC) guidelines. These guidelines are critical for financial institutions to authenticate the identities of their clients, thus preventing illicit activities like money laundering.

Visa Worldwide Pte Limited was found to have implemented a payment authentication solution without obtaining the necessary approval from the RBI. Upon discovering this, the RBI issued a notice to Visa Worldwide, demanding an explanation for the violation. In response, Visa Worldwide filed an application to compound the infraction. After evaluating the application and considering oral submissions during a personal hearing, the RBI concluded that the violation could be resolved through compounding.

Similarly, Manappuram Finance and Ola Financial Services were found to be in breach of the RBI's KYC requirements. Notices were issued to these companies, offering them the opportunity to respond in writing and present oral submissions. After reviewing their responses, the RBI decided to impose penalties on both entities.

In addition to the KYC violations, Ola Financial Services reported a shortfall in the balance of its escrow account, a special account used to hold funds securely. The company also applied to compound this violation, which the RBI accepted, agreeing to resolve the issue in this manner.

The RBI clarified that these penalties are solely based on regulatory compliance failures and do not question the validity of any transactions or agreements made by these companies with their customers.

This action underscores the RBI's commitment to maintaining strict regulatory standards within the financial sector, ensuring that all entities operate within the established legal framework to promote transparency and trust in the system.

read more at timesnownews