This year, India’s central bank, RBI, has turned up the heat on fintechs taking the rulebook lightly or seeing ironclad instructions as open to interpretation.

It fined Ola Financial Services, the operator of Ola Money, Rs 1.67 crore last week and stopped Paytm Payments Bank from onboarding new customers in March. Recently, it disabled the popular industry practice of using credit lines in prepaid wallets. All three instances — there are more involving other companies — are linked to the infraction of ‘know your customer’ guidelines one way or another.

Whom are you dealing with? This simple question forms the basis of almost everything in financial services, from regulation to operation. Don’t trust, verify. And yet, when many fintech founders had to choose between building a customer base swiftly and complying with KYC requirements, they picked the easier path.

It was plain business nous. By offering tech-driven convenience and sparing people lengthy paperwork, the startups won more users. By taking shortcuts or performing half-hearted checks, they also limited their costs. But this era of doing business cheaply is ending as RBI goes about strictly enforcing the KYC rules detailed in its master directions.