The Reserve Bank of India (RBI) imposed penalties on Visa, Manappuram Finance, and Ola Financial Services for non-compliance.
Visa Worldwide Pte Ltd faced a fine of Rs 2.4 crore (nearly $288,000) due to the use of an unauthorised payment method, while the other two operators were penalised for non-compliance with certain provisions of Know Your Customer (KYC) regulations.
“It was observed that the entity had implemented a payment authentication solution without regulatory clearance from RBI,” the Indian regulator commented upon the Visa penalty in a Friday press release.
It was noted that the RBI ordered the credit card company to stop using an unauthorised route to make some commercial payments back in February. Upon a formal notice from RBI, Visa Worldwide submitted a request for compounding the violation. Having reviewed the compounding request and all the arguments presented during the hearing, the RBI concluded the offence was eligible for compounding.
Meanwhile, Manappuram Finance Limited was fined Rs 41.5 lakh, and Ola Financial Services received penalties of Rs 33.40 lakh and Rs 54.15 lakh in two separate violation cases.
About the time RBI first warned Visa about the potential penalty, the regulator banned Paytm Payments Bank from all forms of banking services, including bank transfers and accepting deposits, and prohibited the institution from onboarding new customers.
Other prominent financial institutions affected by similar regulatory actions this year were Kotak Mahindra Bank and IIFL Finance.
In April, RBI prohibited Kotak Mahindra Bank from onboarding new customers via its online and mobile channels and issuing fresh credit cards. The regulator discovered deficiencies in the bank’s IT infrastructure and risk management frameworks.
A month earlier, IIFL Finance was ordered to immediately halt its gold loan operations for new customers due to major lapses in loan handling, including inadequate checks on gold purity and weight, breaches of statutory limits on cash loans, deviations from standard auction processes, and lack of transparency in customer account charges.
