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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