The Reserve Bank of India or RBI has imposed a steep penalty of Rs 1.39 crore on leading digital payments app PhonePe.
Walmart is the owner of PhonePe, and right now leading the UPI payments market in India, with more than 40% market share.
What is the reason for this penalty?
PhonePe, PNB, Sodexo Penalized by RBI
Along with PhonePe, RBI has also penalized other financial companies and Delhi Metro, PNB bank.
Sodexo, which is a leading food services and facilities companies have also been penalized.
Overall, Rs 5.78 crore of penalty has been imposed on six leading financial companies and banks.
Here is the breakdown of the penalties:
Sodexo: Rs 2 crore
PhonePe: Rs 1.39 crore
PNB: Rs 1 crore
QwikCilver Solutions: Rs 1 crore
Muthoot Vehicle & Asset Finance: Rs 34.55 lakh
Delhi Metro Rail Corporation: Rs 5 lakh
While Sodexa has been penalized the most, PhonePe is at #2 in the list.
Except Punjab National Bank, the other entities are non-bank prepaid payment instrument (PPI) issuers.
What Is The Reason Behind These Penalties?
As per the notifications issued, these 6 entities were penalized for not complying with the regulatory guidelines for payment companies.
The penalties have been imposed under Section 30 of the Payment and Settlement Systems Act, 2007.
In a statement, RBI stated, “In exercise of powers vested under Section 30 of the Payment and Settlement Systems Act, 2007, the RBI has imposed monetary penalty on these entities for non-compliance of regulatory guidelines,”
Now, regulatory guidelines are extensive and exhaustive, and there is no clear cut reason provided for imposing these heavy penalties.
The issue can be related with KYC or Know Your Customer guidelines, or it can be related to saving customers’ data, and issues related to privacy as well.
RBI hasn’t yet revealed the exact reason for the penalty.
We will keep you updated, as more details come in.
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