RBI fines Pine Labs for KYC lapses in prepaid payment instruments

The Reserve Bank of India (RBI) has imposed a penalty of Rs 3.10 lakh on Pine Labs Ltd for non-compliance with its guidelines on prepaid payment instruments (PPIs), the central bank said on March 27.

In an order dated March 23, the RBI said the penalty was levied “for non-compliance with certain provisions of the directions issued by RBI on ‘Prepaid Payment Instruments (PPIs)’.”

The action has been taken under the Payment and Settlement Systems Act, 2007.

The penalty follows a statutory inspection of Pine Labs conducted for the period between July 2024 and May 2025. Based on supervisory findings, the central bank had issued a notice to the company asking it to explain why a penalty should not be imposed.

After reviewing the company’s written and oral submissions, the RBI said it found merit in the charge. “The charge against the company of issuing several Full-KYC Prepaid Payment Instruments (PPIs) without completing Know Your Customer (KYC) of the PPI holders was sustained, warranting imposition of monetary penalty,” the central bank said.

The RBI clarified that the action is limited in scope. “The 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 company with its customers,” it said.

It added that “imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.”

On March 27, Pine Labs shares ended the trading session 3.01% lower at Rs 159.45 on the NSE.