PhonePe Penalised ₹21 Lakh by RBI for Regulatory Breach
PhonePe fined by RBI over non-compliance in prepaid payment instrument operations.
The Reserve Bank of India (RBI) announced on Friday that it has levied a penalty of Rs 21 lakh on PhonePe Limited due to non-compliance with norms governing Prepaid Payment Instruments (PPIs). This action stems from a statutory inspection conducted by the central bank, covering the company's operations from October 2023 to December 2024.
Following the inspection, RBI identified supervisory lapses in adhering to its directions. A show-cause notice was issued to PhonePe, prompting the company to submit a written reply, additional documents, and oral arguments during a personal hearing. After reviewing these, RBI upheld the charges, justifying the monetary penalty.
Key violations included maintaining an end-of-day balance in the escrow account that fell short of the value of outstanding PPIs and pending merchant payments on specific days. Additionally, PhonePe failed to promptly report these shortfalls to RBI as required.
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RBI clarified that the penalty addresses regulatory compliance shortcomings and does not question the legitimacy of any customer transactions or agreements executed by PhonePe.
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