RBI Crackdown: Indian Banks and Fintechs Face Penalties

The RBI has penalized several Indian financial entities, including mainstream banks and a fintech company, for KYC norm violations. Failure to comply with these standards can lead to illicit money movements and damage stakeholder trust. Fintech firms' non-compliance highlights the importance of trust in financial partnerships and has led to the reconsideration of relationships with traditional banks. The RBI is enhancing supervision efforts to maintain stability, but investor unease remains.