RBI Imposes ₹29.6 Lakh Penalty on Fino Payments Bank for Licensing Norm Breach

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

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