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RBI IMPOSES FINE ON PAYTM PAYMENTS BANK LTD (PBBL) AND WESTERN UNION FINANCIAL SERVICES INC.

RBI IMPOSES FINE ON PAYTM PAYMENTS BANK LTD (PBBL) AND WESTERN UNION FINANCIAL SERVICES INC.

Context:

Recently, the Reserve Bank of India (RBI) has imposed a fine on two payment providers, Paytm Payments Bank Ltd (PBBL) and Western Union Financial Services Inc.

Key Points:

  • RBI levied a fine of Rs 1 crore on the PBBL. Penalty has been penalized for offenses relating to the Payment and Settlement Systems Act, 2007 (PSS Act).
  • It charged a fine of Rs 27.78 lakh to Western Union Financial Services, which is a cross-border in-bound service operator.
  • It is penalized for non-compliance with specific instructions provided by the central bank.
  • In the request for the issuance of the PBBL's Final Certificate of Authorisation (CoA), the RBI observed that the PPBL had submitted information that did not reflect the correct position. This was the case in terms of Section 26 (2) of the PSS Act.
  • Western Union has reported a case of breach in the ceiling of 30 remittances per beneficiary during 2019 and 2020. It filed an application for compounding the violation.

About Western Union Company:

  • It is an American financial services company.
  • Its headquarters are in Denver, Colorado.
  • The company was founded in 1851.

About Paytm Payments Bank (PBB):

  • The Indian payment bank called PBB was established in 2015.
  • Its headquarters are in Noida.
  • PBB obtained a license to operate a payment bank from the RBI in 2015.
  • It was finally launched in November 2017.

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