Reserve Bank of India Fines Paytm, Western Union for Regulations Violations

The Reserve Bank of India (RBI) has announced a monetary penalty of Rs 1 crore (about $133,670) on Paytm Payments Bank for the charge of submitting information not reflecting the facts, Business Standard reported Wednesday (Oct. 20). That is an offense to the central bank’s Payments and Settlement Act.

“After reviewing the written responses and oral submissions made during the personal hearing, the RBI determined that the aforementioned charge was substantiated and warranted the imposition of a monetary penalty,” RBI said, per the report.

In addition, there was a penalty passed down to Western Union Financial Services for non-compliance with Money Transfer Service Scheme directions, according to a press release.

RBI said in the release that Western Union “had reported instances of breach of the ceiling of 30 remittances per beneficiary during the calendar years 2019 and 2020 and filed an application for compounding of the violation.”

As such, the regulator has said the noncompliance warranted a monetary penalty, the release stated.

Paytm is reportedly close to an initial public offering (IPO) this fall. The FinTech is looking at raising $2.2 billion, which would be the largest Indian public offering, with a $25 billion valuation.

See more: Paytm Aiming for $2.2B IPO in India at $25B Valuation

In February, the company announced that it had reached a record-breaking 1.2 billion monthly transactions. The company processes digital payments in over 500,000 villages in India.

Read more: Paytm, FinTechs Play Leading Role in Furthering India’s Financial Inclusion Agenda

India’s economy has been seeing a surge in FinTechs, with a new Financial Inclusion Index created by the central bank showing that there’s been more progress made to bringing banking services to consumers in the country.

RBI results show that financial inclusion, including access, use and the quality of financial services, rose by 24% in the last four years.