The Central Bank of India has taken action in the form of a fine against the Indian division of Amazon Pay.
The amount of this fine amounted to more than 370 thousand dollars. This measure of punishment is a decision taken on the fact of several circumstances of the activity of the Indian division of the payment system. The local office of the company ignored the need to comply with the rules concerning the interaction with customers and did not comply with the provisions of the regulatory framework governing the use of prepaid payment instruments.
The Reserve Bank of India has issued a statement stating that the Amazon Pay division operating in this country does not take into account the guidelines for the use of digital wallets and the rules for identifying counterparties when carrying out its activities. The regulator did not specify which violations were committed by the branch of the payment system, limiting itself to a generalized designation of inconsistencies with the regulatory base.
The bank’s statement says that the organization was issued a notification with a recommendation to indicate the reason why a fine should not be imposed for non-compliance with the instructions. After receiving a response from the firm, the regulator decided that the penalty measure was justified and fair.
The fine was imposed at a time when the central bank of India is tightening its requirements for fintech and large technology firms. This activity of the regulator is aimed at combating money laundering and suppressing the practice of illegal appropriation of financial resources. Last summer, the use of non-bank prepaid payment instruments, such as prepaid cards, was banned in India.
For startups, this decision of the regulator is painful. Firms usually collaborate with banks to issue cards, then contact non-bank financial institutions or use their own NBFC division to provide credit lines to consumers.
For Amazon, India is one of the important markets. Over the past ten years, the company has directed investments of more than $ 7 billion to activate its activities in this country. Representatives of the firm stated their commitment to compliance with the regulatory framework and noted that Amazon is implementing innovative solutions to make transactions as convenient and secure as possible. They also stated that the company aims to work closely with the authorities.
As we have reported earlier, India’s Central Bank Calls for Outright Ban on Crypto.