RBI fines Paytm Payments Bank For KYC Failings


The Reserve Bank of India (RBI) has imposed a fine of around $650,000 on Paytm Payments Bank for Know Your Customer (KYC) requirements lapses.

Last year, the RBI directed Paytm Payments Bank to cease onboarding new customers and instructed it to engage an IT audit firm due to “supervisory concerns.”

Following a “special scrutiny” of the bank’s KYC and anti-money laundering (AML) procedures, the RBI found several compliance failures:

  1. Paytm Payments Bank failed to identify beneficial owners of entities onboarded for providing payout services.
  2. The bank did not monitor payout transactions or conduct risk profiling of entities using payout services.
  3. Paytm Payments Bank did not promptly report a cyber incident.
  4. The video-based customer identification process allowed connections from IP addresses outside of India.

The penalty underscores the RBI’s commitment to enforcing strict KYC and AML regulations in the financial sector.


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