The Reserve Bank of India (RBI) penalized Amazon Pay (India) Private Limited Rs 3.06 crore for disregarding the Master Directions on Prepaid Payment Instruments (PPIs), issued on August 27, 2021, as well as the Master Direction – Know Your Customer (KYC) Direction, 2016, issued on February 25, 2016. In line with Section 30 of the 2007 Settlement and Payment Systems Act, the fine was imposed. Amazon Pay (India) Private Limited was given the notice to demonstrate cause as to why a penalty shouldn’t be imposed for failing to comply with the instructions after the RBI determined that the company was not in compliance with the KYC standards.
Amazon Pay India has been found to have violated the RBI’s Know Your Customer (KYC) regulations, according to the Central Bank of India (RBI). As a response, Amazon Pay India has been sent a notification asking them to provide justification for not facing consequences for their non-compliance. The KYC regulations mandate that financial organizations confirm the identification of their customers in order to stop financial fraud and other illegal activities. To avoid incurring fines from the RBI, Amazon Pay India must reply to the notice and take the necessary steps to comply with the KYC requirements.
The fine imposed on Amazon Pay emphasizes how crucial it is to abide by the rules established by the RBI. It conveys a powerful signal to all payment system operators that regulatory standards must be strictly followed, particularly with regard to KYC as well as other compliance requirements. Heavy fines for non-compliance may have a negative effect on the standing and viability of the company operating the payment system.
In conclusion, the sanction imposed by the RBI against Amazon Pay (India) Private Limited serves as an important reminder to all payment system operators to strictly adhere to the regulatory framework established by the RBI, especially with regard to the KYC requirements. Operators of payment systems must be diligent in putting in place the proper systems and procedures to guarantee compliance with legal requirements, which can help to avoid penalties and reputational harm.
