The Reserve Bank of India (RBI) has lifted the prohibitions on Mumbai-based Fino Payments Bank‘s new account opening functions. The payments bank can now open new accounts, effective October 22.
The news comes as a relief to the bank, after it was ordered by the RBI to halt its new account opening functions, owing to non-compliance of RBI’s operating guidelines, in August 2018.
In a statement, Fino Payments Bank, said, “It may be noted that the RBI had prohibited Fino Payments Bank from opening any new accounts on account of violations of certain licensing conditions and operating guidelines. However, no restrictions were placed by RBI on the bank for servicing existing customers.”
According to RBI’s operating guidelines for payments banks, a customer can make deposits of up to ₹1 lakh per account in a year. Such banks cannot accept deposits beyond this limit.
Talking on the lifting of the RBI ban, Rishi Gupta, MD and CEO, Fino Payments Bank, “We have brought down all account balances to less than Rs 1 lakh. We have also brought in systems, processes and technology changes so that under no circumstance can the balance go beyond Rs 1 lakh.”
Fino Payments Bank received RBI nod to operate as a bank in March 2017. It started operations in September after its launch in July last year. The bank clocks transactions to the value of ₹200 crores in a day, across more than 400 banking outlets and over 50,000 access points.
According to reports, Fino Payments Bank was not the only bank to be prohibited by the RBI to open new accounts, for flouting RBI guidelines.
In June, Paytm Payments Bank had stopped onboarding new customers, following an audit by the RBI, after observing the process followed by the payments bank in acquiring new customers and its KYC norms.
Earlier in January, Airtel Payments Bank was by RBI prohibited from opening new bank accounts, after the RBI found out that the accounts were being opened without specific and clear consent from the customers. Later in July, the bank was given RBI’s approval.