RBI penalty on Pine Labs for compliance failures.
The Reserve Bank of India (RBI) has imposed a penalty of ₹3.1 Lakh on Pine Labs, a fintech company, for non-compliance with regulatory guidelines pertaining to prepaid payment instruments (PPIs). The penalty was announced following an inspection conducted between July 2024 and May 2025.
The RBI stated that Pine Labs was found to have issued full-KYC PPIs without adhering to the necessary know your customer (KYC) procedures. Full-KYC PPIs typically allow for higher transaction and balance limits, which necessitates stringent KYC compliance to mitigate risks associated with fraud and money laundering.
Following the inspection, the RBI issued a show-cause notice to Pine Labs. According to the RBI’s statement, the central bank reviewed the company’s response, additional submissions, and oral arguments presented during a personal hearing. The RBI concluded that Pine Labs had indeed issued full-KYC PPIs without completing the required KYC verification for the PPI holders, which warranted the monetary penalty.
In response to the penalty, Pine Labs acknowledged the RBI’s action in an exchange filing, stating that it anticipates ‘no material impact on its financials, operations, or other activities’.
In a separate announcement, Pine Labs disclosed that its wholly-owned subsidiary, Mopay Services Pvt Ltd (MSPL), has initiated a voluntary process to be removed from the Register of Companies (RoC). The company stated that MSPL is not currently engaged in any business operations or activities. The decision to strike off MSPL is aimed at streamlining the group structure and reducing administrative and compliance overheads. The process is expected to take two to three months, pending regulatory approval, after which MSPL will be dissolved and will no longer be a subsidiary of Pine Labs.
Pine Labs reported its second consecutive profitable quarter in Q3 FY26, with a net profit of ₹42.4 Cr, compared to a loss of ₹56.7 Cr in Q3 FY25. The company’s operating revenue increased by 24% year-over-year to ₹744.3 Cr, and EBITDA rose by 237% to ₹155 Cr during the December quarter of 2025.
Pine Labs made its public market debut in November of the previous year. The company’s shares ended yesterday’s trading session 1.7% lower at ₹161.5 on the BSE.
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