The Reserve Bank of India (RBI) has imposed a financial penalty of ₹29.60 lakh (Rupees Twenty-Nine Lakh Sixty Thousand only) on Fino Payments Bank Limited. This penalty comes in response to the bank’s failure to adhere to specific guidelines issued by the RBI regarding the ‘Licensing of Payments Banks.’ The penalty has been imposed under the provisions of Section 47A(1)(c) and Section 46(4)(i) of the Banking Regulation Act, 1949.
Penalty Imposed After RBI Inspection of Fino Payments Bank
The penalty follows an inspection of Fino Payments Bank’s operations, known as the Statutory Inspection for Supervisory Evaluation (ISE 2024), which focused on the bank’s financial position as of March 31, 2024. During this inspection, the RBI identified multiple instances of non-compliance with regulatory guidelines, particularly concerning the ‘Licensing of Payments Banks.’ As a result, the RBI issued a notice to the bank, asking for an explanation as to why a penalty should not be levied.
After reviewing the bank’s response to the notice and considering the oral submissions made during the personal hearing, the RBI concluded that Fino Payments Bank had breached a crucial regulatory limit:
- The bank had repeatedly violated the end-of-day balance ceiling, which is a key compliance requirement for payments banks, on several occasions.
The action taken by the RBI is intended to ensure stricter adherence to regulatory norms and is not an indication of the validity of any transactions or agreements made by the bank with its customers. In addition, this penalty does not preclude the possibility of further regulatory measures being taken by the RBI against the bank.
Ensuring Compliance in the Payments Bank Sector
This penalty emphasizes the importance of compliance in the banking sector, especially for payments banks, which are subject to specific operational rules. The RBI’s action aims to maintain the integrity of the financial system and ensure that all financial institutions operate within the regulatory framework.
By imposing this penalty, the RBI reinforces its commitment to ensuring that banks uphold the highest standards of regulatory compliance and safeguard the interests of their customers.
