RBI imposes Penalty Of Rs 1.67 Crore On Ola Financial Services Over Non-Compliance of KYC Guidelines

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Chennai: The Reserve Bank of India on Tuesday said it imposed a penalty of Rs 1.67 crore on Ola Financial Services Private Limited for non-compliance with KYC norms. The RBI said the penalty was also imposed as the company has breached certain norms laid out by the bank in connection with Prepaid Payment Instrument or PPIs.

The central bank said it has issued a notification in this regard, saying that Ola Financial Services did not provide satisfactory response to its show cause notice which was sent earlier. 

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“The Reserve Bank of India (RBI) has imposed monetary penalty of Rs 1,67,80,000/- (Rupees one crore sixty seven lakh eighty thousand only) on Ola Financial Services Private Limited (the entity) for non-compliance with certain provisions of the Master Directions on PPIs dated August 27, 2021 (as updated from time to time) and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time),” the RBI said in a statement.

Announcing the penalty of Rs 1,67,80,000, the RBI said Ola Financial Services did not comply with its Know Your Customer direction.

The RBI also added that the penalty has been imposed in exercise of powers vested in the central bank under Section 30 of the Payment and Settlement Systems Act, 2007.

“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers,” the RBI said.

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According to RBI, Ola Financial Services was non-compliant with the directions issued by the RBI on KYC requirements.

Accordingly, notice was issued to the entity advising it to show cause as to why penalty should not be imposed for non-compliance with the directions, the RBI said.

After considering Ola Financial Services’ response, the RBI concluded that the charge of non-compliance of its directions was substantiated and warranted imposition of monetary penalty.