The Reserve Bank of India (RBI) has imposed a penalty of ₹3.1 lakh on Cashfree Payments India Pvt Ltd for non-compliance with norms governing payment aggregators (PAs) and payment gateways (PGs).
As per the news reports, the order was issued on March 9 under provisions of the Payment and Settlement Systems Act, 2007.
The central bank stated that the action relates to deficiencies in regulatory compliance and does not address the validity of transactions carried out by the company with its customers.
The penalty follows a statutory inspection covering the period from April 2024 to June 2025. During this review, the RBI identified lapses in adherence to its guidelines applicable to payment intermediaries.
Based on these findings, a show cause notice was issued to the company, seeking an explanation for the observed breaches. The regulator reviewed the response and additional submissions before proceeding with the penalty.
The RBI found that Cashfree had carried out certain “impermissible debit” transactions from an escrow account. Such accounts are meant to hold merchant funds and are subject to defined usage conditions.
The regulator concluded that the charge relating to these transactions was sustained. The penalty was imposed under Section 30(1) read with Section 26(6) of the Payment and Settlement Systems Act, 2007.
The development comes amid continued regulatory action in the fintech sector. In recent months, the RBI has taken steps against multiple entities for non-compliance.
These include a compounding order of ₹18.8 lakh on Paytm over alleged violations under foreign exchange rules.
The central bank has also tightened rules around lending against shares and exposure to capital market intermediaries, affecting multiple platforms.
Founded in 2015, Cashfree Payments provides payment gateway services, payout solutions and banking APIs. The company reports serving more than 1 million businesses and processing transactions worth about $80 billion annually.
For FY25, the company reported a net loss of ₹154.1 crore, compared with ₹135 crore in the previous year. Operating revenue stood at ₹640 crore, slightly lower than ₹642.7 crore reported in FY24.
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The penalty shows ongoing regulatory oversight of payment intermediaries, with compliance requirements continuing to be enforced across the sector.
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Published on: Mar 18, 2026, 1:17 PM IST
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