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After Paytm, RBI now asks Fino Payments Bank to stop adding new users on its platform: Reports

Fino POS

Exactly a day after reports emerged that the Reserve Bank of India asked Paytm Payments Bank to stop adding new customers, it is now being reported that Fino Payments Bank has also been served a notice by the central bank to halt inducting new customers. According to reports, RBI took the step after noticing that some customers of Fino Payments Bank deposited amounts exceeding Rs 1 lakh in their accounts. As per RBI’s operating guidelines for payments banks, the aggregate limit for customers in his/her bank account should not exceed Rs 1 lakh and in case it exceeds, the excess amount should automatically be transferred to any other bank account, provided by the customer at the time of opening the account with the payment banks. The duration of the central bank’s ban on adding new customers remain unclear. Medianama has reached out to Fino Payments Bank for a comment but are yet to receive a reply at the time of publishing.

The Business Line, however, quoted a Fino spokesperson as saying that the RBI directed the payments bank to address the operating guidelines on deposits and that Fino is working towards complying with the directive and is in the process of making necessary product and technology changes.

Curiously enough, the report quoted the spokesperson as saying that the RBI ‘advised’ the company to not open new accounts till the upgraded processes are in place. The central bank’s notice has had no impact on existing customers, the report added. Fino Payments Bank, run by Fino Paytech, became operational in July 2017.

On Wednesday, it was claimed that the central bank has asked Paytm to immediately stop onboarding new customers after learning that the company has violated the processes for conducting full-KYC. It was also reported that the RBI has asked Paytm to remove its payments bank’s CEO Renu Satti for ‘her inability to lead a banking firm’ since she is not a banker. According to RBI norms of payments banks in India, a payments chief executive has to be a banker. We reported on Tuesday that Satti has resigned from her role and will now head Paytm’s ‘New Retail’ business.  Neither the central bank nor Paytm have issued any statements on the matter.

The RBI has also suspended the services of Airtel Payments bank for violating operating guidelines around KYC norms. After 10 months of suspension and a monetary fine, Airtel received requisite approval from the RBI to enroll new customers in July.

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