Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3.10 lakh on Pine Labs for non-compliance with Know Your Customer (KYC) norms related to prepaid payment instruments (PPIs).
The penalty, announced on March 27, 2026, stems from violations identified under the Payment and Settlement Systems Act, 2007. According to the central bank, Pine Labs issued multiple full-KYC prepaid payment instruments without completing the required KYC verification process for customers, which is a key regulatory requirement to prevent fraud and ensure financial transparency.
The action follows a statutory inspection conducted by RBI covering the period from July 2024 to May 2025. Based on the findings, RBI had issued a show-cause notice to the company. After reviewing Pine Labs’ responses and submissions, the regulator concluded that the compliance lapses were valid and warranted a financial penalty.
RBI clarified that the enforcement action is limited strictly to regulatory compliance deficiencies and does not impact the validity of any transactions or agreements between Pine Labs and its customers. It also noted that the penalty is without prejudice to any further action that may be initiated if required.
This development highlights the increasing regulatory focus on KYC compliance, fintech governance, and digital payment security in India’s rapidly growing prepaid payments ecosystem.
