THE RESERVE BANK of India (RBI)
said on Thursday it has directed a
card network to stop using an unauthorised route to make business-tobusiness payments.The central bank
did not name the entity.
“It has come to the notice of the
Reserve Bank of India
that a card network had
an arrangement that
enabled businesses to
make card payments
through certain intermediaries to entities
that do not accept card
system. Under the provisions of the
Payment and Settlement Systems
(PSS) Act, 2007, such payment system requires authorisation under
Section 4 of the PSS Act,which has
not been obtained in the instant
case. The activity was, therefore,
withoutlegal sanction,”the RBI said.
The central bank said commercial payments routed through a
third party raised two
concerns: largeamounts
of funds being pooled
into an account of the
intermediary and transactions being processed
without adequate information onwho the funds
payments,” the RBI said were going to.“Transacin astatement.
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