Here's why RBI slaps ₹5.39 crore penalty on Paytm Payments Bank

The Reserve Bank of India (RBI) has imposed a penalty of ₹5.39 crore on Paytm Payments Bank Ltd for non-compliance with various provisions, including Know Your Customer (KYC) norms.

The central bank found issues related to 'RBI Guidelines for Licensing of Payments Banks,' 'Cybersecurity framework in banks,' and 'Securing mobile banking applications, including the UPI ecosystem.'

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A detailed audit and KYC/AML scrutiny revealed that the bank failed to identify beneficial owners for entities onboarded for payout services, didn't monitor payout transactions, and exceeded regulatory limits in certain customer advance accounts.

RBI's penalty is based on regulatory compliance deficiencies and does not pass judgment on specific transactions or agreements. Additionally, a penalty of ₹4 lakh was imposed on Annasaheb Magar Sahakari Bank, Pune, for non-compliance with certain provisions."