RBI penalizes Ola Financial, Visa, Manappuram Finance for non-compliance with rules

The Reserve Bank of India (RBI) imposed fines on payment system operators Visa Worldwide, Ola Financial Services and Manappuram Finance for deficiencies in regulatory compliance.

The central bank imposed a penalty of ₹2.4 crore on Visa Worldwide Pte Limited, ₹41.5 lakh on Manappuram Finance Limited and ₹87.55 lakh fine on Ola Financial Services in two cases.

Monetary penalty on payment system operators (PSOs) Manappuram Finance and Ola Financial Services were imposed for non-compliance with certain provisions of know your customer (KYC) directions, the RBI said in a statement issued on July 16, 2024.

The RBI’s compounding orders were also issued to Ola Financial Services and Visa Worldwide “for contravention of certain provisions contained in the Master Directions on Prepaid Payment Instruments (PPIs)” and “Card Not Present transactions – Relaxation in Additional Factor of Authentication for payments upto ₹2000/- for card network provided authentication solutions”.

“The above actions have been taken in exercise of powers vested in RBI under the provisions of Section 30 and Section 31 of the Payment and Settlement Systems Act, 2007 and are based on deficiencies in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers,” the apex bank said in the statement.

Both Manappuram Finance and Ola Financial Services “were non-compliant with the directions issued by RBI on KYC requirements. Accordingly, notices were issued to the entities advising them to show cause as to why penalty should not be imposed for non-compliance with the directions. After considering their written responses and the oral submissions made during the personal hearing, RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty,” the RBI said.

Further, the RBI said Ola Financial Services had also reported instances of shortfall in the balance in its escrow account and filed an application for compounding of the violation.

“After analysing the compounding application and oral submissions made during the personal hearing, RBI determined that the aforementioned contravention can be compounded.”

For Visa Worldwide, the central bank said: “It was observed that the entity had implemented a payment authentication solution without regulatory clearance from RBI. 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.”

“Visa respects and abides by the compliance guidelines, regulations and local laws across the countries we operate in. 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,” said a Visa spokesperson.