Pahal Financial Services is subject to RBI enforcement action for AML/CTF compliance failures, but the entity type is not explicitly identified as a bank, EMI, or PSP, requiring human review of regulatory classification.
The enforcement action centers on AML/CTF deficiencies including suspicious transaction reporting, which are core compliance obligations for payment service providers.
Specialism
The RBI imposed a monetary penalty of ₹3.10 lakh on a named payment services firm for identified breaches of KYC directions and AML/CTF compliance failures, specifically inadequate suspicious transaction reporting systems.
The penalty was explicitly imposed for deficiencies in anti-money laundering and counter-terrorism financing compliance, including failure to implement robust software for suspicious transaction identification and reporting.
2026-06-19 12:52:34·pthandapani@vixio.com
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Press Releases - Reserve Bank of India
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TITLE: Reserve Bank of India Imposes Monetary Penalty on Pahal Financial Services Private Limited
BODY:
On June 19, 2026, the Reserve Bank of India (RBI) announced it had imposed a monetary penalty of ₹3.10 lakh (Rupees Three Lakh Ten Thousand) on Pahal Financial Services Private Limited by order dated June 18, 2026. The penalty was imposed for non-compliance with provisions of the Reserve Bank of India (Know Your Customer (KYC)) Directions issued by RBI.
The RBI exercised its enforcement powers under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934. A statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2025. Following supervisory findings of non-compliance with RBI directions, RBI issued a show cause notice to the company. After considering the company's reply and oral submissions during a personal hearing, RBI sustained a charge against the company. Specifically, RBI found that the company failed to put in place robust software for effective identification and reporting of suspicious transactions. This deficiency in anti-money laundering and counter-terrorism financing (AML/CTF) compliance formed the basis for the monetary penalty.
RBI stated that this action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. The imposition of this monetary penalty is without prejudice to any other action that RBI may initiate against the company.
REFERENCES:
Reserve Bank of India. "RBI imposes monetary penalty on Pahal Financial Services Private Limited." Press Release, June 19, 2026. https://www.rbi.org.in/
Press Releases - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Press Releases ( 328 kb ) Date : Jun 19, 2026 RBI imposes monetary penalty on Pahal Financial Services Private Limited The Reserve Bank of India (RBI) has, by an order dated June 18, 2026, imposed a monetary penalty of ₹3.10 lakh (Rupees Three Lakh Ten Thousand only) on Pahal Financial Services Private Limited (the company) for non-compliance with certain provisions of the 'Reserve Bank of India (Know Your Customer (KYC)) Directions' issued by RBI. This penalty has been imposed in exercise of powers conferred on RBI under section 58G(1)(b) read with section 58B(5)(aa) of the Reserve Bank of India Act, 1934. The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2025. Based on the supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions. After considering the company’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the company was sustained, warranting imposition of monetary penalty: The company failed to put in place a robust software for effective identification and reporting of suspicious transactions. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company. 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