RBI fines Pine Labs ₹3.1 lakh for KYC lapses amid record profits
The Reserve Bank of India (RBI) has fined Pine Labs Rs 3.1 lakh for failing to complete mandatory 'know your customer' (KYC) checks. The penalty follows an inspection conducted between July 2024 and May 2025, which found the fintech firm issued full-KYC prepaid payment instruments without proper verification.
Meanwhile, the company has reported strong financial growth, with a net profit of Rs 42 crore in the third quarter of 2025-26. The RBI's inspection uncovered regulatory lapses in Pine Labs' operations. Specifically, the company had issued prepaid payment instruments without completing the required KYC procedures. After reviewing the findings, the central bank issued a show-cause notice, concluding that the charges were valid. The penalty was imposed under the Payment and Settlement Systems Act, 2007.
During the same period, Pine Labs recorded a 24% year-on-year increase in operating revenue, reaching Rs 744 crore in Q3 of 2025-26. Earnings before interest, tax, depreciation, and amortisation (EBITDA) also climbed to Rs 171 crore, reflecting improved profitability. The company achieved a 20% adjusted EBITDA margin in the 2025-26 financial year, with plans to raise this to 27% by 2027-28.
Beyond domestic growth, Pine Labs has shifted its focus toward global expansion. International revenue surged 58% between 2023 and 2025, now making up 15% of total revenue. The company completed its initial public offering (IPO) in March 2026 at a $2.9 billion valuation, though this was 40% lower than its 2022 peak. Its merchant payments infrastructure now spans 20 countries, reinforcing its position as a key player in fintech innovation.
Additionally, Pine Labs' subsidiary, Mopay Services Pvt Ltd, has initiated a voluntary process to strike its name from the Registrar of Companies. The RBI's penalty highlights compliance gaps in Pine Labs' operations, while its financial results demonstrate strong growth. With expanding global revenue and a recent IPO, the company continues to strengthen its market position. The next steps will involve addressing regulatory concerns while pursuing further profitability improvements and international expansion.
