In a fresh bout of trouble, Mumbai-based Fino Payments Bank has been fined ₹1 crore by the Reserve Bank of India (RBI).
In a fresh notification, “The Reserve Bank of India (RBI) has, on October 31, 2018, imposed a monetary penalty of ₹1 crore on Fino Payments Bank Limited (the bank) for contravention of the direction to stop opening of new accounts until further instructions.”
According to the apex bank, “The penalty has been imposed in the exercise of powers vested in RBI under the provisions of Section 47A (1) (c) read with Section 46 (4) (i) of the Banking Regulation Act, 1949.”
In August, it was reported that RBI had halted Fino Payments Bank’s account opening functions, in regards to flouting RBI guidelines for payments bank, that prohibits them to have bank accounts with more than ₹1 lakh in any given account.
The ban was lifted last month by the central bank, allowing Fino Payments Bank to resume opening of new accounts.
The latest monetary fine pertains to the period when the ban, prohibiting Fino Payments Bank to open any new accounts was in place, prior to the October announcement.
Fino Payments Bank is one of the latest entrants in the list of operating payments banks in the country. It started it operation on 4th April 2017. It started its operations with 410 branches and more than 25,000 banking points.
It currently has a customer base of 1 million and its plans to expand this figure to 3 million customers by March next year.
According to reports, Fino Payments Bank was not the only bank to be prohibited by the RBI to open new accounts, for flouting RBI guidelines. RBI has been taking strict actions, against the banks that have flouted its operating guidelines.
In June, Paytm Payments Bank had stopped onboarding new customers, following an audit by the RBI, after observing the process followed by the payments bank in acquiring new customers and its KYC norms.
Earlier in January, Airtel Payments Bank was by RBI prohibited from opening new bank accounts, after the RBI found out that the accounts were being opened without specific and clear consent from the customers. Later in July, the bank was given RBI’s approval.