Context:
The Reserve Bank of India (RBI) has levied a monetary penalty of ₹29.6 lakh on Fino Payments Bank Ltd for non-compliance with its licensing guidelines applicable to payments banks.
Key Highlights:
- Regulatory Action:
- Penalty imposed under the RBI’s powers to ensure adherence to licensing conditions
- Arising from findings during the Statutory Inspection for Supervisory Evaluation (ISE 2024), based on the bank’s financials as on March 31, 2024
- Nature of Violation:
- The bank exceeded the regulatory ceiling on end-of-day balances in customer accounts— a specific restriction applicable to payments banks, which are designed to hold smaller, transaction-focused balances
- Due Process:
- RBI issued a show-cause notice to Fino Payments Bank
- Considered the bank’s written and oral submissions before concluding that the violation was sustained, necessitating the imposition of the penalty
Regulatory Context
- Payments banks in India operate under limited banking licenses, with restrictions such as:
- No lending activity
- Maximum balance limit of ₹2 lakh per customer (subject to periodic revision)
- Focus on financial inclusion, especially low-income households and migrant workers
