RBI directs payment companies to monitor election period transactions
The Reserve Bank of India (RBI) has issued a directive to all non-banking payment system operators (PSOs). The central bank's advisory is aimed at scrutinizing any high-value financial activities during the Lok Sabha elections, which commenced on April 19. This move is in response to concerns raised by the Election Commission of India (ECI), about the potential misuse of digital payment methods for illicit election-related activities.
Scope of RBI's directive to PSOs
RBI's directive applies to all non-bank PSOs. These include entities that facilitate online transactions between consumers and merchants. These encompass card networks (Mastercard, Visa, Rupay), payment gateways (Cashfree, Razorpay, Mswipe, PayU, Infibeam), and payment apps (BharatPe, MobiKwik, Paytm, Google Pay, PhonePe). The mandate also includes companies involved in international money transfers, ATM networks, instant money transfer services, Prepaid Payment Instruments (PPIs), Trade Receivables Discounting System (TReDS), and Bharat Bill Payment System (BBPS).
ECI requests daily updates on suspicious transactions
In addition to the RBI's directive, the ECI has requested banks to provide daily updates on suspicious transactions throughout the election period. On March 16, Chief Election Commissioner (CEC) Rajiv Kumar instructed banks to submit daily reports on such transactions. Kumar stated that this measure is part of an effort by the election body, to minimize the influence of money and ensure fair elections.
Additional measures to prevent misuse of funds
In a related development, Pune's Income Tax Department has established a control room to monitor and prevent any misuse of funds during the elections. Furthermore, restrictions have been imposed on cash transportation in bank vehicles after sunset. These measures are part of broader efforts to ensure transparency and fairness in the Lok Sabha elections, which are scheduled from April 19 to June 1, with vote counting set for June 4.
