RBI Imposes Monetary Penalty on Pine Labs

The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3.10 lakh on Pine Labs Limited (formerly known as Pine Labs Private Limited) vide an order dated March 23, 2026, in pursuance of its powers granted under Section 30(1) read with Section 26(6) of the Payment and Settlement System Act, 2007. The action has been taken against the said company due to non-compliance with certain provisions of RBI instructions related to ‘Prepaid Payment Instruments (PPI)’

RBI had undertaken a statutory scrutiny of the company’s operations for the period between July 2024 and May 2025. The investigation revealed a lack of compliance with RBI direction. In this regard, a show-cause notice (SCN) was issued to the company, in which clarification was sought regarding why the proposed penalty should not be imposed on it.

After considering the company’s written reply and additional oral submissions made during the personal hearing, the RBI found that the company had issued several full-KYC prepaid payment instruments (PPIs) when the Know Your Customer (KYC) of the respective holders was not completed.

A monetary penalty was imposed on this basis. RBI clarified that this action has been taken based on the deficiencies observed in regulatory compliance and is not intended to comment on the validity of any transaction or agreement entered into by the company with customers. Also, this penalty will be separate from other possible actions taken by RBI in future.