Crossword Genius

Penalty? That’s okay! (4)

Ross

I believe the answer is:

fine

I believe this clue is a double definition.

'penalty?' is the first definition.
(fine is a kind of penalty)

'okay' is the second definition.
(both are ways of saying 'yes')

'that's' is the link.

(Other definitions for fine that I've seen before include "Sheer or excellent" , "First-rate - punishment" , "Money penalty is clear and dry" , "No special brandy" , "Very high quality money penalty" .)

I've seen this clue in The Hindu.
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