Paytm Bank Fined INR 5.4 Crore Over KYC Lapses By RBI

By Consultants Review Team Friday, 13 October 2023

Paytm Payments Bank has been fined Rs 5.4 crore by the RBI for failing to comply with KYC instructions and other cyber security and payments bank requirements.

The RBI undertook a special investigation into KYC/AML (anti-money laundering). Several areas of noncompliance were discovered during the audit, including failure to identify beneficial owners of entities onboarded for providing payout services, a lack of monitoring of payout transactions and risk profiling, exceeding regulatory balance ceilings, failing to report a cybersecurity incident on time, and failing to implement device binding control measures related to SMS delivery receipts. 

The RBI's video-based customer identification procedure (V-CIP) infrastructure was also down, and it was unable to identify anyone logging in from outside the nation. A show-cause notice was sent to the bank. The RBI found that the charge of noncompliance was proved after reviewing its response to the notification and its comments during a personal hearing. 


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