810
3 hours ago
RBI Fines Cashfree For Flouting Payment Aggregator Norms
Summary
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Stay ahead with the latest news, funding, startup financials, & governments policies on the hottest tech industries in the Indian startup ecosystem.
Get featured, partner or work with India's #1 startup media & intelligence platform and explore what else Inc42 has to offer.
D2CX by Inc42 is a 12-week hands-on program to help you level up your D2C game. Learn from India's top 1% D2C founders and experts through actionable insights, proven strategies and tactics on how to 10X your D2C brand.
ManagementX by Inc42 – India’s first Startup Management Program is a 6-month hands-on program that will take you on an intense journey that shatters the outdated “employee mindset” and equips you with the “leader mindset”.
D2CX Foundations by Inc42 is a 6 week hands-on program to help you launch your D2C brand successfully and profitably. Learn from India’s top 1% of D2C founders & experts through actionable insights, proven strategies and tactics on how to launch a successful D2C Brand in 6 weeks.
RBI imposed the penalty after it concluded that the company made certain non-permissible debit from the escrow account in violation of PA norms
The central bank added that the penalty was imposed in exercise of powers under provisions Section 30(1) and Section 26(6) of the Payment and Settlement Systems Act, 2007
Founded in 2015, Cashfree Payments offers digital payment solutions like payment gateway, payout solutions, and banking APIs
The Reserve Bank of India (RBI) has imposed a penalty of ₹3.1 Lakh on fintech soonicorn Cashfree Payments for non-compliance with payment aggregator (PA) and payment gateway (PG) norms.
In a statement, RBI said that it conducted a statutory inspection at Cashfree, pertaining to the company’s operations between April 2024 to June 2025. In its supervisory findings, the central bank found certain non-compliance with guidelines on regulation of PAs and PGs.
The RBI then issued a show cause notice to Cashfree, directing the startup to explain why a penalty should not be imposed for failure to comply with the provisions.
Following the company’s reply, RBI concluded that the company made certain non-permissible debit from the escrow account in violation of the norms. It subsequently imposed the monetary penalty on Cashfree in an order dated March 9.
“After considering the company’s reply to the notice and additional submissions made by it, RBI found, inter alia, that the charge against the company for making certain impermissible debit from the escrow account was sustained, warranting imposition of monetary penalty,” read RBI’s statement.
The central bank added that the penalty was imposed in exercise of powers under provisions Section 30(1) and Section 26(6) of the Payment and Settlement Systems Act, 2007.
Founded in 2015 by Akash Sinha and Reeju Datta, Cashfree Payments offers digital payment solutions like payment gateway, payout solutions, and banking APIs. It claims to have served over 1 Mn businesses since inception, processing transactions worth $80 Bn annually. It caters to companies like MakeMyTrip, Zomato, CRED, Delhivery, among others.
On the financial front, the fintech soonicorn reported a net loss of INR 154.1 Cr in FY25, up 14% from INR 135 Cr in the year ago fiscal. Meanwhile, operating revenue declined marginally to INR 640 Cr in the fiscal under review from INR 642.7 Cr in FY24.
The penalty on Cashfree comes at a time when the RBI has intensified its clampdown on erring fintech platforms. Last month, the central bank slapped a compounding order totalling INR 18.8 Lakh on fintech major Paytm over an alleged Foreign Exchange Management Act (FEMA) breach.
In February itself, RBI announced tightening of norms on loans against shares and credit facilities to capital market intermediaries, directly impacting players like Groww and Angel One.
Prior to this in December last year, the RBI directed multiple banks to stop issuing co-branded credit cards in partnership with OneCard till the fintech unicorn addresses certain concerns.
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ManagementX by Inc42 – India’s first Startup Management Program is a 6-month hands-on program that will take you on an intense journey that shatters the outdated “employee mindset” and equips you with the “leader mindset”.
D2CX Foundations by Inc42 is a 6 week hands-on program to help you launch your D2C brand successfully and profitably. Learn from India’s top 1% of D2C founders & experts through actionable insights, proven strategies and tactics on how to launch a successful D2C Brand in 6 weeks.
Stay ahead with the latest news, funding, startup financials, & governments policies on the hottest tech industries in the Indian startup ecosystem.
Get featured, partner or work with India's #1 startup media & intelligence platform and explore what else Inc42 has to offer.
Stay ahead with the latest news, funding, startup financials, & governments policies on the hottest tech industries in the Indian startup ecosystem.
Get featured, partner or work with India's #1 startup media & intelligence platform and explore what else Inc42 has to offer.
D2CX by Inc42 is a 12-week hands-on program to help you level up your D2C game. Learn from India's top 1% D2C founders and experts through actionable insights, proven strategies and tactics on how to 10X your D2C brand.
ManagementX by Inc42 – India’s first Startup Management Program is a 6-month hands-on program that will take you on an intense journey that shatters the outdated “employee mindset” and equips you with the “leader mindset”.
D2CX Foundations by Inc42 is a 6 week hands-on program to help you launch your D2C brand successfully and profitably. Learn from India’s top 1% of D2C founders & experts through actionable insights, proven strategies and tactics on how to launch a successful D2C Brand in 6 weeks.
RBI imposed the penalty after it concluded that the company made certain non-permissible debit from the escrow account in violation of PA norms
The central bank added that the penalty was imposed in exercise of powers under provisions Section 30(1) and Section 26(6) of the Payment and Settlement Systems Act, 2007
Founded in 2015, Cashfree Payments offers digital payment solutions like payment gateway, payout solutions, and banking APIs
The Reserve Bank of India (RBI) has imposed a penalty of ₹3.1 Lakh on fintech soonicorn Cashfree Payments for non-compliance with payment aggregator (PA) and payment gateway (PG) norms.
In a statement, RBI said that it conducted a statutory inspection at Cashfree, pertaining to the company’s operations between April 2024 to June 2025. In its supervisory findings, the central bank found certain non-compliance with guidelines on regulation of PAs and PGs.
The RBI then issued a show cause notice to Cashfree, directing the startup to explain why a penalty should not be imposed for failure to comply with the provisions.
Following the company’s reply, RBI concluded that the company made certain non-permissible debit from the escrow account in violation of the norms. It subsequently imposed the monetary penalty on Cashfree in an order dated March 9.
“After considering the company’s reply to the notice and additional submissions made by it, RBI found, inter alia, that the charge against the company for making certain impermissible debit from the escrow account was sustained, warranting imposition of monetary penalty,” read RBI’s statement.
The central bank added that the penalty was imposed in exercise of powers under provisions Section 30(1) and Section 26(6) of the Payment and Settlement Systems Act, 2007.
Founded in 2015 by Akash Sinha and Reeju Datta, Cashfree Payments offers digital payment solutions like payment gateway, payout solutions, and banking APIs. It claims to have served over 1 Mn businesses since inception, processing transactions worth $80 Bn annually. It caters to companies like MakeMyTrip, Zomato, CRED, Delhivery, among others.
On the financial front, the fintech soonicorn reported a net loss of INR 154.1 Cr in FY25, up 14% from INR 135 Cr in the year ago fiscal. Meanwhile, operating revenue declined marginally to INR 640 Cr in the fiscal under review from INR 642.7 Cr in FY24.
The penalty on Cashfree comes at a time when the RBI has intensified its clampdown on erring fintech platforms. Last month, the central bank slapped a compounding order totalling INR 18.8 Lakh on fintech major Paytm over an alleged Foreign Exchange Management Act (FEMA) breach.
In February itself, RBI announced tightening of norms on loans against shares and credit facilities to capital market intermediaries, directly impacting players like Groww and Angel One.
Prior to this in December last year, the RBI directed multiple banks to stop issuing co-branded credit cards in partnership with OneCard till the fintech unicorn addresses certain concerns.
Unlock special offers and join 10,000+ founders, investors & operators staying ahead in India’s startup economy.
Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the
hottest startup deals, supercharge your innovation projects, and stay updated with expert
curation.
Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn
to validate ideas, acquire customers, secure funding, and navigate the journey to startup
success.
Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence,
understand market landscapes, and decode emerging trends to make informed decisions.
Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful
investors, and keep track of upcoming funds, accelerators, and more.
Join a community of 10,000+ leaders & operators – unlock unlimited access to Inc42 stories,
videos, deals, member-only perks, and more.
Unlock unlimited access to 500+ monthly new stories and Inc42’s complete archive of
40,000+ stories.
Unlock unlimited access to 500+ monthly new stories and Inc42’s complete archive of
40,000+ stories.
Over $250,000 worth deals on software & tools to help your business scale up.
Network with industry leaders & operators with exclusive invites to Inc42’s
member-only virtual events
Enjoy an ad-free and clutter-free
experience as a member, focus on
what really matters to you
Your contribution will go on to
support and empower our unbiased
& data-driven journalism
Join 1000's of entrepreneurs, business leaders & makers and stay ahead with our sharp,
incisive & data-driven analysis on India’s tech and startup economy!
Unlock personalised stories, ad-lite reading, and exclusive newsletters on Inc42.
Tired Of Playing Catchup On Indian Tech?
Stay Ahead. Every Morning at 8
Get The Week’s Most Consequential Developments.
Inc42 In-Depth is your daily 9 PM newsletter with sharp insights from India’s startup economy.
Inc42 Moneyball is your Thursday newsletter on India’s venture capital trends. 4 PM sharp.
Inc42 Markets is your weekly newsletter on tech IPOs & startup stocks. Every Sunday
get access to a list of 200+ family offices betting big on startups
Get access to a list of Alma Mater Of India's Unicorn & Soonicorn Founders
Explore 75,000+ startups, 3,500+ investors, 25,000+ funding rounds and more. Build shortlists and export them instantly.
Login or create a free account to continue reading in private mode.
AI Description
The Reserve Bank of India (RBI) has imposed a penalty on Cashfree for not adhering to payment aggregator norms. This action highlights the regulatory scrutiny on fintech companies to ensure compliance with financial regulations.