Indian business of Amazon Pay – the UPI-based digital payment system run by Amazon in India – has been slammed with a fine of ₹3.06 crore by the Reserve Bank of India (RBI) on Friday. According to a press release by the country’s apex bank, the financial penalty was imposed due to Amazon Pay (India)’s non-compliance with certain norms.
“It was observed that the entity was non-compliant with the directions issued by RBI on KYC requirements,” the RBI said in a statement. Furthermore, the financial penalty of ₹3,06,66,000 was imposed upon Amazon Pay for not complying with certain provisions related to Prepaid Payment Instruments (PPIs), apart from the Know Your Customer (KYC) direction.
Apart from the imposition of the hefty fine, the apex bank of the country has also issued a notice to the entity, advising it to show cause regarding why the financial penalty should not be imposed upon it for its non-compliance with the norms. In its press release, the bank added that the charge of not complying with the aforementioned directions was “substantiated,” and that it “warranted” the imposition of the monetary penalty upon the entity.
“We remain deeply committed to operating as per regulatory guidelines and maintaining a high compliance bar, while we innovate on behalf of our customers to offer them a safe and convenient payments experience. We continue to work closely with the authorities to share our commitment with them,” a spokesperson for Amazon said in a statement.
The development comes at a time when RBI is cracking down on fintech firms and predatory business practices by tech startups and established companies. The bank went on to inform that it slammed Amazon Pay (India) with the fine under Section 30 of the Payment and Settlement Systems Act, 2007 and that it was solely based on deficiencies in the entity’s compliance. Additionally, it was not “intended to pronounce upon the validity of any transaction or agreement entered into by Amazon Pay (India) with its customers.”