Amazon Pay Fined Over Rs 3 Crore by RBI for KYC Norms Non-Compliance
The Reserve Bank of India (RBI) has imposed a penalty of over Rs 3 crore on Amazon Pay, a subsidiary of e-commerce giant Amazon, for non-compliance with norms governing prepaid instruments and violation of know your customer (KYC) guidelines.
Amazon Pay allows customers to store money in a prepaid account and also operates as a wallet for other payment instruments. However, the RBI found the company to be non-compliant with its KYC directions, prompting it to issue a notice to Amazon Pay and advising it to show cause as to why a penalty should not be imposed.
After considering the entity’s response, the RBI concluded that the charge of non-compliance with its directions was substantiated, and a monetary penalty was warranted. This fine comes as part of the RBI’s efforts to ensure that all payment service providers comply with the guidelines set forth to safeguard the interests of customers and the integrity of the payment system.
The RBI’s KYC guidelines require payment service providers to verify the identity of their customers and perform due diligence to prevent money laundering and other illegal activities. Failure to comply with these guidelines can result in penalties, as demonstrated by Amazon Pay’s case.
The RBI’s move is also part of a wider crackdown on non-compliant payment service providers, with the regulator recently imposing penalties on other companies for similar violations. In November 2021, for instance, the RBI imposed a penalty of Rs 2.5 crore on payment aggregator Paytm for KYC and other regulatory breaches.
Amazon Pay’s penalty is a reminder to all payment service providers to ensure they are fully compliant with KYC norms and other regulatory requirements. With the rapid growth of digital payments in India, it is essential that payment service providers maintain the highest standards of security, transparency, and compliance to protect their customers’ interests and the integrity of the payment system as a whole.