Punjab National Bank, which is a State-run bank, works under the authorization of the Reserve Bank of India. But recently, it observed that it was operating a bilateral ATM sharing arrangement with its international subsidiary that is Druk Punjab National Bank Ltd, Bhutan since 2010 without taking any approval from the Reserve Bank.
The bank was found to be violating Section 26(6)
of the Payment and Settlement Systems Act, 2007
and thus the Reserve Bank imposed a fine of Rs 1 crore on it. The RBI even said that for engaging in the operation of prepaid payment instruments and non-compliance of regulatory requirements, it had cancelled the Certificates of Authorisation of five Payment System Operators in the exercise of its power given to it under the Payment and Settlement Systems Act, 2007 which included Delhi Integrated Multi-Modal Transit System Limited, Pyro Networks Private Limited, Card Pro Solutions Private Limited, InCashMe Mobile Wallet Services Private Limited and Aircel Smart Money Limited.
It said that after this cancellation, the entities without certificates cannot continue its business of issuance and operation of prepaid payment instruments. And any people having any claim against these companies can get their claims settled by those companies within 3 years.