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The Reserve Bank of India has levied an INR 3.1 lakh penalty on Cashfree Payments India Pvt Ltd for non-compliance with regulatory directives. The inspection covered the period from April 2024 to June 2025, and the penalty followed an initial notice and confirmation of violations. The RBI noted that the action addresses deficiencies in statutory and regulatory compliance, without challenging the validity of transactions with customers. Cashfree failed to follow specific guidelines for payment aggregators and gateways, and the penalty was applied under powers provided by the Payment and Settlement Systems Act, 2007.
The Reserve Bank of India (RBI) recently imposed a penalty of INR 3.1 lakh on payment aggregator Cashfree Payments India Private Ltd for not adhering to its regulatory directions. The central bank's order highlighted that Cashfree had made certain impermissible debits from an escrow account. Advertisement
The penalty follows a statutory inspection of the company's operations conducted between April 2024 and June 2025. RBI had initially issued a notice to Cashfree, and the monetary penalty was applied after the issues were confirmed. The central bank clarified that the action addresses deficiencies in statutory and regulatory compliance and does not question the validity of any transactions or agreements Cashfree has entered into with its customers.
Cashfree was found to be non-compliant with specific RBI directions under the Guidelines on Regulation of Payment Aggregators and Payment Gateways. The penalty was imposed under the powers granted to RBI by Section 30(1) read with Section 26(6) of the Payment and Settlement Systems Act, 2007.
This is not the first instance where RBI has taken action against payment aggregators. Over the past few years, the central bank has tightened compliance norms for entities handling customer funds through escrow accounts to ensure financial stability and protect customer interests.
Source PTI
FAQ
Q1: Why did RBI impose a penalty on Cashfree Payments?
A1: RBI imposed a penalty of INR 3.1 lakh on Cashfree Payments India Pvt Ltd for non-compliance with regulatory directives, specifically related to the operation of payment aggregators and gateways.
Q2: What period did the RBI inspection cover?
A2: The inspection covered Cashfree Payments operations from April 2024 to June 2025.
Q3: Was the penalty issued immediately?
A3: No. RBI first issued a notice to Cashfree Payments. After confirming the violations, the central bank applied the monetary penalty.
Q4: Does the penalty affect customer transactions?
A4: No. RBI clarified that the penalty addresses statutory and regulatory compliance deficiencies and does not question the validity of any transactions or agreements with customers.
Q5: Under which law was the penalty imposed?
A5: The penalty was applied under powers granted to RBI by Section 30(1) read with Section 26(6) of the Payment and Settlement Systems Act, 2007.
Q6: What specific violations did Cashfree commit?
A6: Cashfree failed to comply with RBI guidelines for payment aggregators and gateways, including making impermissible debits from an escrow account.
Q7: Has RBI taken similar actions against payment aggregators before?
A7: Yes. In recent years, RBI has tightened compliance norms for payment aggregators to ensure financial stability and safeguard customer interests, and has taken action against other non-compliant entities.
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