RBI imposes Rs 1.7 cr penalty on Ola Financial Services for breach of norms

The Reserve Bank of India (RBI) on Tuesday has imposed monetary penalty of Rs 1.67 crore on Ola Financial Services Private Limited (the entity) for non-compliance with certain provisions.

"RBI has imposed monetary penalty of ₹1,67,80,000/- (Rupees one crore sixty seven lakh eighty thousand only) on Ola Financial Services Private Limited (the entity) for non-compliance with certain provisions of the Master Directions on PPIs dated August 27, 2021 and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time)," said RBI in a statement. 

The penalty has been imposed in exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers.

"It was observed that the entity was non-compliant with the directions issued by RBI on KYC requirements. Accordingly, notice was issued to the entity advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.

"After considering the entity’s response, RBI concluded that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty," said RBI.