NCLAT: Corporate Debtor’s Guarantor Liability Unchanged Despite Internal Adjustments Among Creditors  ||  NCLAT: Plea under IBC Section 7 Can't Be Restored After Corporate Debtor Pays Principal & Interest  ||  Delhi HC: Wife Can Be Denied Maintenance If She Fails To Submit Latest Salary Slips  ||  Kerala HC: Income of Parent Who Abandoned Family Shouldn’t Count For EWS Reservation Eligibility  ||  Gujarat HC: Writ Courts Interfering in Arbitral Procedure Orders Defies A&C Act’s Purpose  ||  Delhi HC: Plaintiff Doesn’t Have Vested Right to File Rejoinder under CPC  ||  J&K&L HC: Name Change Is Fundamental Right; Boards Must Consider Legal Documents, Not Reject Request  ||  SC: Administrative Delays by State Agencies Must Not Be Condoned  ||  Sc: When Sale Deed Is Void, Possession Suit Follows 12-Year Limitation under Article 65, Not Art 59  ||  SC: Preliminary Inquiry Report Can’t Stop Court from Directing FIR Registration    

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 2025 - All Rights Reserved