Ola Financial Services Private Limited has been fined 1.67 crore rupees by the Reserve Bank of India (RBI) for failing to follow certain rules on pre-paid payment instruments and Know Your Customer requirements.
After taking into account the entity’s response, RBI came to the conclusion that the aforementioned accusation of failing to follow RBI instructions was true and called for the implementation of a financial penalty.
“The RBI has imposed a monetary penalty of ₹1,67,80,000 on Ola Financial Services Private Limited for non-compliance with certain provisions of the Master Directions on PPIs dated 27 August, 2021 and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016,” it said in a statement.
The ride-hailing app Ola’s subsidiary Ola Financial Services Private Limited provides financial services include lending for two- and four-wheelers, personal loans, and insurance products.
According to the central bank, the fine was levied using the authority granted to RBI by Section 30 of the Payment and Settlement Systems Act, 2007.
“It was observed that the entity was non-compliant with the directions issued by RBI on KYC requirements,” the central bank said.
A notice was issued to the entity advising it to show cause as to why penalty should not be imposed for non-compliance with the directions, the statement read.
“After considering the entity’s response, RBI concluded that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty,” the RBI said.
It added that the fine is based on regulatory compliance shortcomings and is not meant to rule on the legality of any deal that Ola Financial Services has made with its clients.
