RBI imposes ₹1.67 cr penalty on Ola Financial Services

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.67 crore on Ola Financial Services Pvt. Ltd, for non-compliance with some provisions related to pre-paid payment instruments and know your customer (KYC) norms.

Ola Financial Services, the fintech subsidiary of ride-hailing firm Ola, offers financial services such as lending for two-wheelers, four-wheelers, personal loans and insurance products.

"The Reserve Bank of India (RBI) has imposed monetary penalty of ₹1,67,80,000 on Ola Financial Services Private Limited (the entity) for non-compliance with certain provisions of the Master Directions on PPIs dated August 27, 2021 and the Master Direction – Know Your Customer (KYC) Direction, 2016 dated February 25, 2016," the central bank says.

It was observed that the entity was non-compliant with the directions issued by RBI on KYC requirements, the RBI says. "Accordingly, 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," it adds.

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 banking regulator says.

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.

Meanwhile, the Reserve Bank of India cancelled the certificate of registration of four non-banking financial companies (NBFCs). These entities include Kanva Shree Credit Pvt. Ltd, Williamson Magor & Co. Ltd., Galaxy Capital Finance Ltd. and SRS Finance Ltd.

Earlier this month, the RBI imposed a monetary penalty of ₹1.05 crore on Kotak Mahindra Bank Ltd. for not complying with the central bank's rules. The lender had failed to credit (shadow reversal) the amount involved in the unauthorised electronic transactions to the customers' account within 10 working days from the date of notification by the customer, in certain cases. The bank also failed to maintain or apply margin on advances to stock brokers.