On 12-07-2022, the Reserve Bank of India (‘RBI’) imposed a penalty of Rs 1 crore and 67.80 lakh on Ola Financial Services Private Ltd (‘Ola’) for not complying with certain provisions of Master Direction on Prepaid Payment Instruments (‘PPI’) dated 27-08-2021 and Master Direction Know Your Customer (‘KYC’) Direction dated 25-02-2016.
- Ola was non-compliant with KYC directions issued by RBI to which a show cause was issued as to why penalty should not be imposed.
- On the basis of Ola’s response, RBI concluded that there is non-compliance and warranted imposition of monetary penalty.
- The penalty is based on deficiencies in regulatory compliance and the intention is not to pronounce validity of any transaction or agreement entered into by the entity with its customers.
- The penalty has been imposed in exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007 that should be paid within a period of 30 days from the date of issue.