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The Reserve Bank of India (RBI) has taken strict regulatory actions against two major banks for lapses in compliance with its directions and guidelines.
Paytm Payments Bank Penalty:
RBI has imposed a monetary penalty of ₹5.39 crore on Paytm Payments Bank Limited for violations of the Know Your Customer (KYC) Directions, 2016, guidelines for payments banks, and cybersecurity frameworks.
A special scrutiny and comprehensive system audit revealed several deficiencies, including. Failure to identify beneficial owners of entities using payout services. Inadequate monitoring and risk profiling of payout transactions. Breach of end-of-day balance limits for certain customer accounts. Delay in reporting cybersecurity incidents. Weaknesses in the Video-Based Customer Identification Process (V-CIP).
After considering the bank’s submissions during a personal hearing, RBI concluded that the non-compliance was substantiated and warranted the penalty.
Bank of Baroda Suspension:
In a separate action, RBI directed Bank of Baroda to suspend further onboarding of customers onto its ‘bob World’ mobile application. The move comes after supervisory concerns were observed in the bank’s customer onboarding process via the app. The bank is required to rectify deficiencies and strengthen processes before resuming onboarding, while ensuring that already onboarded customers continue to have uninterrupted services.
RBI emphasized that these actions are in line with its mandate to ensure robust regulatory compliance, customer protection, and cybersecurity in the banking sector.
[RBI]