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December 24, 2021updated 20 Jan 2022 8:24am

Indian central bank fines Mobikwik, Spice Money for breaching norms

By Johney Amala

The Reserve Bank of India (RBI) has penalised two India-based payment system operators One Mobikwik Systems Private and Spice Money for violating regulations.

The two companies are now required to pay $1,33,275 (INR10m) in penalty to the apex bank for committing offences of the nature referred to in Section 26 (6) of the Payment and Settlement Systems Act, 2007 (PSS Act).

RBI said in a statement: “RBI has imposed monetary penalty on two Payment System Operators (PSOs) for committing offences of the nature referred to in Section 26 (6) of the Payment and Settlement Systems Act, 2007 (PSS Act).”

The bank said that the two firms failed to comply with its direction on net-worth requirement for Bharat Bill Payment Operating Units (BBPOUs).

“As these were offences of the nature referred to in Section 26 (6) of the PSS Act, notices were issued to the entities. After reviewing their written responses and the oral submissions made during the personal hearing, RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty,” it said in the statement.

The penalties have been imposed by the RBI under the provisions of Section 30 of the PSS Act.

The bank also stated that its actions pertain to deficiencies in regulatory compliance, and they are “not intended to pronounce upon the validity of any transaction or agreement entered into” by the firms with their customers.

Separately, the RBI extended the final date for implementing card tokenisation after merchants and payment firms in the country came forward with their inability to adhere to the 31 December deadline.

The new deadline for storing Card on File data is now 30 June 2022.

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