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New delhi: The reserve bank of India (RBI) has imposed a Fine of ₹ 21 Lakh on Digital Payment Platform PhonePe. This fin has been imposed for not properly following the rules to prepaid payment instruments (PPI).

RBI Had Conducted A Statutory Investigation of the Operations of PhonePe from October 2023 to December 2024, in which many flaws was revised.

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What was found in the investment?

DURING The Investigation, It was found that PhonePe’s Escrow Account (in which customers’ money is kept safe) was many times less than the balance required for prepaments and payments to merchantes. Not only this, but this deficiency was also not reported to rbi on time, which is a violation of the rules.

RBI’s Action Process

First of all, RBI sent a show cause notice to phone on the basis of insurance. After this, phonePe Gave its reply and additional Clarification. After considering all these things, RBI decided that the company has indeed violated the rules. After this, a Fine of ₹ 21 Lakh was imposed.

Reserve Bank of India

What will be the impact on customers?

RBI has also cleared that this fin has been imposed only due to deficiencies in regulatory compliace. This will not affect the validity of ongoing transactions or agrements between phonePe and customers. That is, the services of the customers and their money are safe.

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Fines have been imposed earlier too

This is not the first time phonePe has been fined:

• In 2019, a Fine of ₹ 1 Crore was imposed for non-compliance with Foreign Portfolio Investor (FPI) rules.
• In 2020, a Fine of ₹ 1.39 Crore was imposed on other regulatory violations.

It is important for big fintech companies like PhonePe to Strictly Follow All RBI Rules. This fin is a warning that there will be no compromise on customer money and transparency of the system. However, PhonePe’s services are still running, and customers do not need to worry about anything.