The Reserve Bank of India (RBI) on Thursday imposed a penalty of Rs 5.39 crore on Paytm Payments Bank for failure to comply with various provisions, including Know Your Customer (KYC) norms, according to media reports.
The RBI conducted a special scrutiny of the bank’s KYC/AML practices and conducted a comprehensive system audit. Based on the reports, it was found that Paytm Payments Bank did not properly identify beneficial owners for entities using their payout services.
Additionally, the bank neglected to monitor payout transactions and conduct risk profiling for these entities. The RBI also discovered that Paytm Payments Bank exceeded the regulatory ceiling for end-of-day balances in certain customer advance accounts.
After issuing a notice to the bank, the RBI has decided to impose the penalty for these non-compliance issues. It’s important to note that the penalty is solely based on regulatory deficiencies and does not question the validity of any transactions or agreements made by the bank with its customers.
In a separate incident, the RBI has also imposed a penalty of Rs 4 lakh on Annasaheb Magar Sahakari Bank in Pune for violating certain provisions.
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