The Reserve Bank of India has imposed a fine of approximately $650,000 on Paytm Payments Bank for deficiencies related to Know Your Customer (KYC) regulations.
Last year, the central bank instructed Paytm Payments Bank to halt the onboarding of new customers and mandated the appointment of an IT audit firm due to “supervisory concerns.” Following a thorough review focused on KYC and Anti-Money Laundering (AML) compliance, the RBI identified various non-compliance issues with its rules.
The findings revealed that the bank did not adequately identify the beneficial owners of entities it onboarded for payout services. Additionally, it failed to monitor payout transactions effectively and did not conduct proper risk profiling of the entities utilizing these services. Furthermore, Paytm Payments Bank neglected to report a cyber incident in a timely manner and allowed its video-based customer identification process to connect from IP addresses outside of India.