Reserve Financial institution of India (RBI) has imposed financial penalty of ₹2.44 lakh on Spice Cash Ltd for non-compliance with sure provisions of its instructions regarding issuance and operation of pay as you go fee devices (PPIs).
PPIs are devices that facilitate buy of products and providers, monetary providers, remittance services, and so on., in opposition to the worth saved therein.
The central financial institution, in a press release, mentioned: “It was noticed that the entity (Spice Cash) was non-compliant with the instructions issued by RBI on upkeep of escrow account stability. Accordingly, discover was issued to the entity advising it to indicate trigger as to why penalty shouldn’t be imposed for non-compliance with the instructions.”
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RBI noticed that after contemplating the entity’s written responses and oral submissions made throughout the private hearings, it concluded that the aforesaid fees of non-compliance with its instructions have been substantiated and warranted imposition of financial penalty.
As per RBI’s grasp instructions on PPIs, a non-bank PPI issuer is required to keep up the excellent stability in an escrow account with any scheduled business financial institution. An extra escrow account could also be maintained with a distinct scheduled business financial institution on the discretion of the PPI issuer.
A non-bank PPI issuer that’s member of Centralised Cost Techniques operated by RBI shall preserve a Present Account with RBI. Upkeep of escrow stability needs to be based on the instructions.
“The penalty has been imposed in train of powers vested in RBI below the provisions of Part 30 of the Cost and Settlement Techniques Act, 2007. This motion is predicated on deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the entity with its clients,” the assertion mentioned.