RBI imposes Rs 1.68 crore penalty on Ola Financial Services

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 1.68 crore on Ola Financial Services Pvt. Ltd. for non-compliance with the banking regulator’s certain provisions and Know Your Customer (KYC) guidelines.

The RBI, in a statement, said that it has “imposed monetary penalty of Rs 1,67,80,000/- (Rupees one crore sixty-seven lakh eighty thousand only) on Ola Financial Services Private Limited (the entity) for non-compliance with certain provisions of the Master Directions on PPIs dated August 27, 2021 (as updated from time to time) and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016 (as updated from time to time).”

The banking regulator also revealed that the penalty has been imposed in the exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007.

Moreover, it should be noted that this action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the entity with its customers.

RBI further stated that it had observed that the entity was non-compliant with the directions issued on KYC requirements. Accordingly, notice was issued to Ola Financial Services advising it to show cause as to why a penalty should not be imposed for non-compliance with the directions.

RBI, after considering Ola Financial Services' response, concluded that the aforesaid charge of non-compliance was substantiated and warranted imposition of monetary penalty.