The Reserve Bank of India (RBI) has fined PhonePe Rs 21 lakh for failing to comply with key PPI regulations. During an inspection carried out between October 2023 and December 2024, the regulator found that the company’s escrow account balance was lower than the value of outstanding prepaid payment instruments (PPIs). On certain days, it was also lower than merchant payments. It also failed to promptly report this shortfall, which is a mandatory requirement under RBI norms.
Regulatory Action on PhonePe
According to guidelines, non-bank PPI issuers must maintain escrow balances equal to or greater than outstanding PPIs and immediately inform the RBI of any gap. This is not the first time PhonePe has faced regulatory action. Similar fines were imposed in 2019 and 2020. The latest penalty underscores the RBI’s strict stance on ensuring transparency and stability in India’s booming digital payments sector.
