The Reserve Bank of India is taking a firm stance on enforcing compliance with KYC and PPI regulations by companies, as the central bank on Friday imposed a penalty of 3.06 crore rupees on Amazon Pay (India) Private Limited for failing to comply with certain provisions of Prepaid Payment Instruments (PPIs) and Know Your Customer (KYC) directives.
Amazon Pay India is an online digital wallet introduced by Amazon, which enables customers to pay for goods, services and utilities through their Amazon accounts.
In August 27, 2021 and February 25, 2016, the Reserve Bank of India issued master directions on Prepaid Payment Instruments (PPIs) and Know Your Customer (KYC), respectively. These master directions are regularly updated by the Reserve Bank of India to align with changes in rules and regulations. Companies that fall under the purview of these master directions are expected to comply with the updated norms without fail.
According to a statement released by the Reserve Bank, it was discovered that Amazon Pay was not adhering to certain norms outlined in the KYC directives. As a result, the central bank issued a notice to Amazon Pay India, requesting that the company provide an explanation for its non-compliance and why the central bank should not impose a fine.
Upon receipt and careful analysis of Amazon’s response, the Reserve Bank of India decided to impose a penalty on Amazon Pay (India) Private Limited.
The Reserve Bank of India has levied charges against Amazon Pay (India) Private Limited under Section 30 of the Payment and Settlement Systems Act, 2007. It is important to note that the penalty is a result of the company’s non-compliance with regulatory requirements and is not meant to pass judgment on the validity of any agreements or transactions entered into by Amazon Pay with its customers.
The Reserve Bank of India has issued master directions on Know Your Customer (KYC) to ensure that financial institutions operating in the country comply with the highest standards of due diligence. The directive outlines the various procedures and documentation requirements that financial institutions must follow to verify the identity of their customers and prevent fraudulent activities.
Few days ago Reserve Bank of India imposed monetary penalties ranging from Rs50,000 to Rs 4 lakh on 10 cooperative banks for non-compliance with various rules and regulations. The banks were found to have violated KYC norms and failed to categorize customers based on risk profiles.
Some of the banks penalized by the RBI include Sudha Cooperative Urban Bank Ltd, Suryapet, Telangana, and The Satara Sahakari Bank Ltd, Mumbai.