RBI imposes Rs3cr penalty on Amazon Pay for non-compliance
09 March 2023
The Reserve Bank of India (RBI) has imposed monetary penalty of over Rs3 crore (Rs3,06,66,000) on Amazon Pay (India) Private Limited for non-compliance with certain provisions of the master directions on Prepaid Payment Instruments (PPIs).
The Reserve Bank of India said in a statement that Amazon Pay (India) was non-compliant with certain provisions of the guidelines on prepaid payment instruments (required by a company to operate as a digital wallet) and know your customer issued by the central bank on KYC requirements, but did not elaborate precisely which rules were violated
RBI has found that Amazon Pay (India) is in violation of its master directions on PPI of 27 August 2021 (as updated from time to time) and the master direction – Know Your Customer (KYC) Direction, 2016 dated 25 February 2016 (as updated from time to time).
“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. 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,” it said in a statement.
The fine comes at a time when the Indian central bank is toughening its compliance requirements for fintech and Big Tech firms in the country as it cracks down on money laundering and predatory business practices.
India is a key market for Amazon, which has deployed over $7 billion in the country over the past decade.
“We remain deeply committed to operating as per regulatory guidelines and maintaining a high compliance bar, while we innovate on behalf of our customers to offer them a safe and convenient payments experience. We continue to work closely with the authorities to share our commitment with them,” an Amazon spokesperson said in a statement.
The penalty has been imposed in exercise of powers vested in RBI under Section 30 of the Payment and Settlement Systems Act, 2007.
RBI said the 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.