Lok Sabha Question No. 1443 (UNSTARRED), answered on 2019-07-01
Subject: Mobile Wallet Companies
Ministry: FINANCE
Asked by: Lallu Singh, Ravi Kishan Shukla, P.P. Chaudhary, Rodmal Nagar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION No.  1443

To be answered on Monday, July 01, 2019/Ashadha 10, 1941 (Saka)

## Mobile Wallet Companies

1443. SHRI LALLU SINGH:

SHRI RAVINDRA SHYAM NARAYAN SHUKLA ALIAS RAVI KISHAN:

SHRI P.P. CHAUDHARY:

SHRI RODMAL NAGAR:

Will the Minister of FINANCE be pleased to state:

- (a)  the  number  of  cases  registered  in  regard  to  violation  of  rules/guidelines  by  the  companies providing mobile wallet and the agencies providing online payment services and the details of action taken against the said violators during each of the last five years;
- (b) whether any better action plan is being prepared in addition to the existing guidelines relating to the said payments;
- (c) if so, the details thereof including the details in regard to Madhya Pradesh; and
- (d) if not, the action being taken by the Government in this regard?

## Answer

## The Finance Minister (SMT. NIRMALA SITHARAMAN)

- (a)  to  (d) As  apprised  by  the  Reserve  Bank  of  India  (RBI),  the  list  of  Prepaid  Payment Instrument  (PPI)  issuers,  banks  and  Cross  border  Money  Transfer  (in-bound  only)  operators, found in violation of regulatory guidelines during the last five years is as follows:

| Name of the Entity                           | Date of the order   | Penalty (in Rs.)   |
|----------------------------------------------|---------------------|--------------------|
| Eko India Financial Services Private Limited | March 9, 2017       | 5,00,000/-         |
| My Mobile Payments Limited                   | October 22, 2018    | 1,00,00,000/-      |
| Phonepe Private Limited                      | February 14, 2019   | 1,00,00,000/-      |
| Y-Cash Software Solutions Private Limited    | February 22, 2019   | 5,00,000/-         |
| Vodafone m-pesa Limited                      | March 06, 2019      | 3,05,00,000/-      |
| GI Technology Private Limited                | March 26, 2019      | 1,00,00,000/-      |
| ZipCash Card Services Pvt. Ltd.              | April 22, 2019      | 11,25,000/-        |
| Yes Bank Limited                             | April 22, 2019      | 11,25,000/-        |
| One Mobikwik Systems Pvt. Ltd.               | May 17, 2019        | 15,00,000/-        |

| Hip Bar Private Limited               | May 24, 2019   | 10,85,000/-   |
|---------------------------------------|----------------|---------------|
| Western Union Financial Services Inc. | April 20, 2018 | 29,66,959/-   |
| MoneyGram Payment Systems Inc.        |                | 10,11,653/-   |

As per RBI's master direction dated 11.10.2017 (updated on 29.12.2017 and on 25.2.2019) on 'Issuance and Operation of Prepaid Payment Instruments (PPIs)', including Mobile wallets, the PPI  issuers  are  to  have  a  strong  Risk  Management  system,  for  the  safety  and  security  of  the payments  systems  operated  by  them  and  to  put  in  place  formal,  publicly  disclosed  customer grievance redressal framework.

Further  RBI's  circular  dated  4.1.2019 on  'Customer  Protection  -  Limiting  Liability  of Customers  in  Unauthorised  Electronic  Payment  Transactions  in  Prepaid  Payment  Instruments (PPIs)  issued  by  Authorised  Non-banks',  inter  alia,   stipulates  'Zero  Liability  of  a  customer' where:

- i. the unauthorised electronic payment transaction through a PPI occurs due to contributory fraud / negligence/ deficiency on the part of the PPI issuer, irrespective of whether or not the transaction is reported by the customer; or
- ii. due to third party breach where the deficiency lies neither with the PPI issuer nor with the customer but lies elsewhere in the system, and the customer notifies the PPI issuer within three working days of receiving the communication from the PPI issuer regarding the unauthorised transaction.

Further  the  PPI  issuer  is  mandated  to  credit  the  amount  involved  in  such  transactions  to  the customer's PPI within ten days from the date of such notification by the customer.

The  circular  also  stipulates  limited  liability  of  a  customer  for  the  loss  occurring  due  to unauthorized transactions in certain cases. Further, in case of PPI issued by banks, customers can have recourse to the Banking Ombudsman Scheme for redressal of their grievances.

RBI also continuously endeavours to promote digital transactions in safe and secure manner and to identify the gaps and plug them for enhancing safety and security of the system which includes Prepaid Payment Instruments (PPIs) also.

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