Reserve Bank of India On Tuesday, June 12, it said it has imposed a fine of Rs 1,67,80,000 on Ola Financial Services Pvt Ltd for non-compliance of KYC norms. The company had also imposed the penalty for violating certain norms set by the bank with respect to prepaid payment instruments or PPIs. Notifying the decision in a press release that day, RBI said that Ola Financial Services did not respond satisfactorily to the show cause notices sent earlier.
“The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹ 1,67,80,000/- (Rupees One Crore Sixty Lakh Eighty Thousand only) on Ola Financial Services Private Limited (Entity) for non-compliance of certain provisions. Master Direction on PPI dated 27th August, 2021 (updated from time to time) and Master Direction – Know Your Customer (KYC) Directions, 2016 dated 25th February, 2016 (as updated from time to time) Is. RBI in its press release
“The penalty has been imposed in exercise of the powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007,” the central bank said. “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers.”
Explaining the reason for imposing penalty on Ola Financial Services, RBI said, it had earlier sent a show cause notice to the company that it was violating KYC norms, but Ola could not give a suitable reply. “It was observed that the entity was not complying with the directions issued by RBI on KYC requirements. Accordingly, notice was issued to the unit to show cause as to why penalty should not be imposed for non-compliance of the directions. ,
The central bank further said that after considering the company’s response, the RBI concluded that “the allegation of non-compliance with RBI’s directions was substantiated and warranted imposition of monetary penalty.” The central bank, however, did not elaborate on what provisions were violated by the company.
Ola Financial Services has not issued any statement on the issue.
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