SC: Daughter Doesn't Lose Ties With Natal Family After Marriage, Such Stereotype is Unconstitutional  ||  SC: Limitation For Filing S.34 Appeal Starts From Disposal of S.33 Application, Allowed or Rejected  ||  SC: In Cases of Drug Trade Threats to the Nation, Sovereignty Prevails over Personal Liberty  ||  Delhi HC: Plaintiff Can Obtain a Refund of Court Fees After an IBC Resolution Plan “Settlement”  ||  Ker HC: Default Bail is Available if Final Report is E-Filed After 5 Pm on Last Statutory Day  ||  J&K&L HC: NDPS Act Provisions Extending Investigation Time Apply to Narco-Terror Cases under UAPA  ||  Supreme Court: Courts Have Sometimes Failed Arbitration, With Interference Curing No Disease  ||  Supreme Court: Co-Heir Cannot Sell Other Heirs' Shares as Karta After Intestate Succession  ||  SC: Casual Labourers With Temporary Status are Eligible For Pension Even Without Regularisation  ||  Supreme Court: High Courts Must Record the Nature of Crime and Allegations While Quashing FIRs    

Restraining of Unauthorized Payment System- (Reserve Bank of India) (15 Feb 2024)

MANU/RPRL/0102/2024

Banking

1. It has come to the notice of Reserve Bank of India that a Card Network had an arrangement that enables businesses to make card payments through certain intermediaries, to entities that do not accept card payments.

2. Under this arrangement, the intermediary accepts card payments from corporates for their commercial payments and then remits the funds via IMPS/RTGS/NEFT to non-card accepting recipients.

3. On closer scrutiny, it was observed that this arrangement qualified as a payment system. Under the provisions of Payment and Settlement Systems (PSS) Act, 2007, such payment system requires authorization under Section 4 of PSS Act, which has not been obtained in the instant case. The activity was, therefore, without legal sanction.

4. The arrangement has also raised following concerns:

i. The intermediary in the above arrangement pooled large amount of funds into an account which is not a designated account under PSS Act.

ii. Transactions processed under this arrangement did not comply with the originator and beneficiary information requirements, as stipulated under Master Direction on KYC issued by the Reserve Bank.

5. As per information available, only one card network has operationalized this arrangement in the country so far.

6. As the matter is under detailed examination, the Card Network has been advised to keep all such arrangements under abeyance, till further orders. It is clarified that the Reserve Bank has not placed any restriction with respect to normal usage of business credit cards.

Tags : RESTRAINING   UNAUTHORIZED   PAYMENT SYSTEM  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved