RBI Imposes Penalties on Visa, Ola Financial, and Manappuram for Regulatory Non-Compliance

Synopsis: The Reserve Bank of India (RBI) has imposed fines on Visa Worldwide, Ola Financial Services, and Manappuram Finance for non-compliance with regulatory norms, particularly KYC directives. Visa was fined Rs 2.4 crore, Ola Financial Services Rs 87.55 lakh for multiple violations, and Manappuram Finance Rs 41.5 lakh. These penalties are based on regulatory deficiencies and do not judge the legality of transactions between these firms and their customers.

The Reserve Bank of India (RBI) has recently imposed monetary penalties on several financial entities for failing to adhere to regulatory norms. Visa Worldwide Pte Limited, Ola Financial Services, and Manappuram Finance Limited have been fined for deficiencies in regulatory compliance, particularly relating to Know Your Customer (KYC) norms and other regulatory directives.

Key Penalties Imposed:

Visa Worldwide Pte Limited: Fined Rs 2.4 crore for implementing a payment authentication solution without regulatory clearance from the RBI.

Ola Financial Services: Penalized Rs 33.40 lakh for non-compliance with KYC directions and Rs 54.15 lakh for other regulatory compliance deficiencies under the Payment and Settlement Systems Act, 2007.

Manappuram Finance Limited: Fined Rs 41.5 lakh for not adhering to KYC directions and other regulatory norms.

The penalties were imposed following comprehensive evaluations of the companies' written responses and initial submissions. For instance, Visa Worldwide was found to have implemented a payment solution without necessary approval from the RBI. Following a formal notice and a subsequent compounding request, the RBI concluded that the offense was eligible for compounding.

Ola Financial Services faced fines for both KYC non-compliance and regulatory deficiencies. The firm submitted a compounding application after identifying instances of balance shortfalls in its escrow account. After reviewing the application and hearing the company's representations, the RBI decided that the violations could be compounded.

Manappuram Finance's penalty was related to its failure to comply with KYC norms and other specified regulatory provisions. The RBI clarified that these penalties are based on regulatory compliance shortcomings and do not reflect judgments on the legality of transactions or agreements between these entities and their customers.

A spokesperson from Visa stated that the company respects and adheres to compliance guidelines, regulations, and local laws across all countries it operates in and is committed to following RBI guidelines to provide secure payment solutions in India.