RBI Fines PhonePe Rs 21 Lakh for PPI Escrow Shortfalls

Overview

• A statutory inspection covering October 2023 to December 2024 found end-of-day escrow balances below outstanding prepaid wallets and merchant dues on certain days.
• PhonePe also failed to immediately report the escrow shortfalls to the central bank, according to the order.
• The penalty was imposed under Section 30(1) read with Section 26(6) of the Payment and Settlement Systems Act, 2007.
• After reviewing the company’s written and oral submissions, the RBI upheld non-compliance and said further action could follow if required.
• The company recently surrendered its NBFC licence and, according to reports, is preparing an IPO with appointed bankers and an ESOP buyback plan, while maintaining a leading UPI share.