India, March 28 -- The RBI has imposed a penalty of Rs.3.1 Lakh on fintech major Pine Labs for failing to comply with guidelines related to prepaid payment instruments (PPIs).

The central bank, in a statement, said it found Pine Labs in violation of PPI norms by issuing full-KYC PPIs without completing the required know your customer (KYC) checks.

The penalty order came after the RBI carried out inspection of the company's operations between July 2024 and May 2025.

Full-KYC PPIs carry higher transaction and balance limits compared to minimum-detail PPIs, making KYC compliance a critical regulatory requirement to prevent fraud and money laundering.

Following the inspection, the central bank issued a show-cause notice to the company. "A...