Here is Why RBI Has Imposed Penalties on Vodafone m-pesa, PhonePe & Others For Regulatory Violations
Vodafone has clarified its stand on the matter.
The Reserve Bank of India (RBI) has imposed penalties on five prepaid payment instrument (PPI) issuers for violating regulatory norms in India. The PPIs that have been penalized include Vodafone’s m-pesa, Flipkart’s PhonePe, My Mobile Payments Limited which own Oxigen, Y-Cash Software Solutions Private Limited which owns YPayCash and GI Technology Private Limited.
The RBI says, “In exercise of powers vested under Section 30 of the Payment and Settlement Systems Act, 2007, the Reserve Bank of India has imposed monetary penalty on the following five PPI Issuers for non-compliance of regulatory guidelines.” The penalty on Vodafone m-pesa is Rs 3.05 crore, PhonePe is Rs 1 crore, My Mobile Payments Limited has been penalized Rs 1 crore, Y-Cash Software Solutions Private Limited Rs 5 lakh and GI Technology Private Limited has also been penalized Rs 1 crore.
Vodafone has clarified its stand on the matter. “This is an old matter for which we had represented to the RBI clarifying our position. We also deposited the amount as directed by RBI. We are committed to operating the business in full compliance with all applicable rules,” says a Vodafone spokesperson in a statement shared with News18.
But what really is the Section 30 of the Payment and Settlement Systems Act, 2007? According to the guidelines, every system provider will have to disclose to the existing or potential system participants, the terms and conditions including the charges and the limitations of liability under the payment system, supply them with copies of the rules and regulations governing the operation of the payment system, netting arrangements and other relevant documents. This means that all parties need to be privy to full disclosure about the conditions and the potential risks involved in any payment system. The rules also state that the payment obligations and settlement instructions among the system participants shall be determined in accordance with the gross or netting procedure, as the case may be, approved by the Reserve Bank at the time of giving authorization to the payment system.
The rules state that failure to comply with the regulations would incur a penalty which has to be paid within 30 days of the order being passed.
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