Page 12 - Banking Finance November 2017

RBI CORNER

RBI to allow payment from one e-wallet to another RBI slaps Rs. 6-crore fine

Reserve Bank has decided to allow payments from one e-wallet operator to on Yes Bank for rule vio-
another by facilitating inter-operability within
6 months. RBI, has incorporated a rider that lation
the facility will be allowed only for KYC com- The Reserve Bank of India has
pliant users, which is a small proportion of the slapped a mon-
overall user base. The RBI is expected to re- etary penalty of
vise its norms for inter-operability soon. Rs 6 crore on
Yes Bank and
The development comes at a time when digi-
Rs 2 crore on
tal payments in India are moving towards payments platforms like unified pay- IDFC Bank for violating regulations
ments interface (UPI) where money need not be locked in a wallet. UPI enables issued by the regulator. Yes Bank has
transfers directly from a bank account. been fined for non-compliance with
the directions issued by RBI on In-
So far, leading wallets like Paytm, Freecharge and Mobikwik operate in a closed
loop structure where the money movement is restricted within the network of come Recognition Asset Classification
(IRAC) norms and delayed reporting
a mobile wallet. After demonetisation, digital payments saw a sudden spike in
of information security incident in-
wallet usage but cash usage is almost back to pre-demonetisation levels as cash
volving ATMs of the bank.
is back in the market. Moreover, options such as net banking, debit and credit
cards are being preferred for digital payments. "The Reserve Bank of India has im-
posed on October 23, 2017, a mon-
The RBI measure is not seen to be providing a major boost to wallet players. etary penalty of Rs 6 crore on Yes
"First, the base of KYC compliant users even for the largest player like Paytm Bank for non-compliance with the
would not be more than five million, which includes merchants. Second, the wallet directions issued by RBI on Income
users are changing their loyalty based on the amount of discount. So this new Recognition Asset Classification
move might not have a huge impact on the ecosystem," said Arnav Gupta, ana- (IRAC) norms and delayed reporting
lyst at Forrester Research. of information security incident in-
volving ATMs of the bank," RBI said
Digital wallets, backed by venture capital money, have been offering discounts
in a statement.
and cashback to get users to open accounts with them. Alibaba and Softbank-
A statutory inspection of Yes Bank
backed Paytm leads this space on the back of its funding. Companies like Mobikwik
with reference to its financial position
and Freecharge too have taken a similar approach for customer acquisition.
as on March 31, 2016 revealed vio-
lations of various regulations issued by
Reserve Bank keeps interest rates unchanged
RBI in the assessment of non-per-
RBI's monetary policy committee kept key interest rates unchanged, but soft- forming assets. Apart from that a
ened its hawkish stance after retail inflation and cyber-security incident involving
economic growth slowed sharply. While the repo ATMs of the bank was also not re-
rate-at which the central bank infuses liquidity ported by the bank within the pre-
in the banking system-has been kept unchanged scribed timeframe.
at 6.25%, the RBI lowered its inflation forecast “After considering the bank’s replies,
for the current fiscal. The MPC has projected oral submissions made in the personal
headline inflation at 2-3.5% in the first half of the year and 3.5-4.5% in the sec- hearings, as also the additional infor-
ond half. Economists see this as an indication that the central bank may be ac- mation and documents furnished, RBI
commodative on the future course of rates in a bid to revive economic growth. came to the conclusion that the afore-
said charges of non-compliance with
NE small finance bank starts: RBI RBI directions were substantiated and

North East Small Finance Bank Limited has commenced operations as a small warranted imposition of monetary
finance bank, the RBI has said. penalty,” the regulator said.

12 | 2017 | NOVEMBER | BANKING FINANCE

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