RBI directs TalkCharge to
return funds in PPI- wallets to consumers
The Reserve
Bank of India (RBI) on Thursday directed Gurugram-based company TalkCharge to
refund the prepaid funds held in the wallets of its customers. This directive
comes as TalkCharge has been issuing Prepaid Payment Instruments (Wallets)
without proper authorisation from the central bank.
What had
happened?
TalkCharge
offers services such as cashbacks, coupons, and wallets to customers. The
company had issued a legal notice to its customers demanding the return of
cashback while threatening them that failure to do so would result in the
matter being reported to the RBI. The fintech firm has created an impression in
the minds of its customers that demand for repayment of cashback amount is
being made as per the directions of the RBI.
The central
bank had issued directions on April 2, 2024, to the entity to stop the issuance
and operation of its Prepaid Payment Instruments or Wallets and refund the
balances held in the wallets within 15 days. Later, it was extended by 45 days
(May 17, 2024) at the entity's request.
What did
the regulator say?
The Reserve
Bank said it had come to the notice of the central bank that TalkCharge
Technologies is issuing PPI through its website and app (application)
'TalkCharge' without obtaining the required authorisation under the provisions
of the Payment and Settlement Systems Act, 2007.
Further,
the Central bank also cautioned the public to exercise utmost caution while
using websites/applications and parting with their money to any such
unauthorised entity.
"Members
of the public should verify and satisfy themselves that the website/application
used or the entity they are dealing with is authorised to carry out the
activity it performs," the RBI said.
What should
consumers do?
This
incident has come to light at a time when even regulated fintech startups are
facing heightened scrutiny regarding due diligence on their customers. As this
situation unfolds, it serves as a reminder for individuals to thoroughly check
the credentials of digital payment platforms before entrusting them with their
money.
www.business-standard.com
dt. 27.04.2024