RBI imposes Rs 21 lakh penalty on PhonePe
MUMBAI: The Reserve Bank of India (RBI) on Friday announced a penalty of Rs 21 lakh on PhonePe Limited for non-compliance with certain regulations governing ‘Prepaid Payment Instruments’ (PPIs).
The central bank said it conducted a statutory inspection of PhonePe covering its operations from October 2023 to December 2024. The inspection revealed instances where the company did not adhere to RBI’s directions regarding PPIs.
Following these findings, the RBI issued a show-cause notice to PhonePe, asking the company to explain why a penalty should not be imposed. After reviewing PhonePe’s written response, additional submissions, and oral arguments during a personal hearing, the RBI concluded that the non-compliance was substantiated, warranting a monetary penalty.
“The end-of-day balance in the company’s escrow account was, on certain days, less than the value of outstanding PPIs and payments due to merchants. Moreover, the company did not immediately report the shortfall in the escrow account to RBI,” the central bank noted.
The RBI clarified that the penalty relates solely to regulatory compliance deficiencies and does not question the validity of any transactions or agreements PhonePe has entered into with its customers.
