RBI fines Paytm Payments Bank for breach of norms

The RBI has slapped a Rs 5.39 crore fine on Paytm Payments Bank for not complying RBI guidelines related to know your customer (KYC) norms and not reporting incidents of cyber security breaches in time.

The RBI said that a special scrutiny report and a comprehensive system audit report has revealed non-compliance with norms by Paytm Payments Bank on the following grounds:

The bank failed to identify beneficial owner in respect of entities onboarded by it for providing payout services.

It did not monitor payout transactions and carry out risk profiling of entities availing payout services.

The bank breached the regulatory ceiling of end of the day balance in certain customer advance accounts availing payout services.

Reporting a cyber security incident with delay.

Failure to implement device binding control measure related to 'SMS delivery receipt check', and

Paytm Bank's V-CIP infrastructure failed to prevent connections from IP addresses outside India.

The RBI also said that the action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

(With inputs from IANS)