India’s central bank said on Thursday it had imposed a fine of 53.9 million rupees ($647,762.58) on payments bank Paytm for non-compliance with certain provisions, including customer knowledge (KYC) guidelines.
According to the Reserve Bank of India (RBI), Paytm Payments Bank has not identified the beneficial owners of the entities it engages to provide payment services.
Banks also failed to monitor payment transactions and establish risk profiles among other entities that benefit from payment services.
Last year, the RBI had barred Paytm Payments Bank from acquiring new customers and ordered a comprehensive audit of its IT systems, citing “significant” supervisory issues observed at the bank.
Paytm Payments Bank also violated regulatory restrictions on end-of-day balances in certain advance accounts of customers availing payment services, the central bank said in a statement.
Additionally, lenders are late in reporting cyber security incidents, the RBI added.
Paytm, which competes with players like Google Pay and Walmart’s PhonePe in India, saw its founder and CEO Vijay Shekhar Sharma become the company’s largest shareholder after Chinese company Antfin sold its stake in August.
The move comes amid broader concerns over China’s involvement in Indian fintech companies.
Earlier this year, China’s Alibaba Group sold its remaining stake in Paytm for around Rs 13.78 billion in a block deal.
($1 = 83.2095 Indian rupees)
