RBI fines PPI for non-compliance of regulatory norms
The Reserve Bank of India (RBI) on Friday penalised five Prepaid Payment Instrument (PPI) issuers and two remittance service providers for non-compliance of regulatory guidelines. The fined parties include Vodafone m-pesa, Flipkart’s PhonePe and Mobile Payments and Western Union Financial Services Inc, USA and MoneyGram Payment Systems Inc. The action has been taken under Section 30 of the Payment and Settlement Systems Act, 2007 for compounding of the contravention, says a report.
A fine of Rs 3.05 crore has been levied on Vodafone m-pesa and Rs 1 crore each on Mobile Payments and PhonePe. The Western Union Financial Services Inc and MoneyGram Payment Systems Inc have been fined Rs 29.67 lakh and Rs. 10.12 lakh respectively. The penalties on Western Union and MoneyGram had been imposed by the central bank.
The guideline clearly states that the system provider will be required to disclose the existing or potential system participants, the terms and conditions which include charges, limitations of liability under the payment system, netting arrangements and other relevant documents.
In other words, the system providers will be required to fully disclose the conditions and potential risks involved in the payment system.
The fine is to be paid within 30 days of the order being passed.