RBI Charges Amazon Pay For Not Following KYC Rules

Amazon Pay (India) Pvt Ltd was fined Rs 3.06 crore by the Reserve Bank of India on Friday for not following the Prepaid Payment Instruments (PPIs) norms and Know Your Customer (KYC) norms.

In a statement, the Reserve Bank of India says it fined the company 30.7 million rupees because it didn’t follow the rules.

“The penalty has been imposed in exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007. 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 said.

Responding to RBI’s decision to impose monetary penalty, an Amazon spokesperson said,

“We remain deeply committed to operating as per regulatory guidelines and maintaining a high compliance bar, while we innovate on behalf of our customers to offer them a safe and convenient payments experience. We continue to work closely with the authorities to share our commitment with them.”

Industry sources say that in 2017, the RBI told fintech companies like Amazon Pay to use video KYC instead of going door-to-door to do the same thing. They were also told that video KYC must be done by the fintech companies themselves, not by third-party agencies. Sources say that Amazon made more technology and hired more people to help with video KYC. All of its KYC is now done through videos. But many fintech companies, including Amazon Pay, were slow to move at first, and RBI has now punished them for that.

The central bank says that after deciding that Amazon Pay wasn’t following the rules, it asked the company for an explanation before deciding that the problem “warranted imposition of monetary penalty.”