RBI fines Pine Labs for KYC lapses in prepaid payment instruments

The Reserve Bank of India (RBI) has fined Pine Labs Ltd a sum of Rs 3.10 lakh due to failures in adhering to regulations regarding prepaid payment instruments (PPIs). This penalty was officially announced by the central bank on March 27, following a directive dated March 23. The RBI's decision stems from a statutory review of Pine Labs that took place between July 2024 and May 2025. During this inspection, the RBI identified serious breaches of its established guidelines for PPIs. Consequently, the bank issued a notice to Pine Labs, requesting an explanation for the potential penalty. After evaluating both the written and oral responses from Pine Labs, the RBI concluded that the company had indeed violated regulations. Specifically, the RBI highlighted that Pine Labs had issued multiple Full-KYC Prepaid Payment Instruments without properly completing the Know Your Customer (KYC) process for the holders of these instruments. It's important to note that the RBI's actions are focused solely on regulatory compliance issues and do not question the legitimacy of any transactions or agreements between Pine Labs and its customers. The central bank also indicated that this financial penalty does not preclude the possibility of further actions against the company in the future. In response to the news of the penalty, shares of Pine Labs dropped by 3.01%, finishing the trading day at Rs 159.45 on the National Stock Exchange (NSE).