RBI Asks Payment Firms To Track High-Value, Suspicious Transactions During Elections

The RBI in a letter, which was reviewed by NDTV Profit, asked non-bank payment system operators to track and report any high-value or suspicious transactions during the election season.

<div class="paragraphs"><p>Reserve Bank of India logo (Image: Vijay Sartape/NDTV Profit)</p></div>
Reserve Bank of India logo (Image: Vijay Sartape/NDTV Profit)

The Reserve Bank of India has asked non-bank payment system operators, or PSOs, to track any high-value or suspicious transactions through electronic modes of payment, according to a copy of the letter reviewed by NDTV Profit.

In the letter dated April 15, the regulator has asked PSOs to do the needful in light of Lok Sabha Elections 2024.

This is because various electronic modes of payment have the potential to be used for the transfer of money. This money is then used to influence voters or to fund the candidates participating in the elections, the RBI said.

"You are accordingly advised to do the needful and report high-value/suspicious transactions to the appropriate authorities or agencies as per the guidelines issued by the ECI from time to time," RBI said in the letter.

The development also comes after the Election Commission of India raised concerns in this regard. It also recommended taking appropriate action when necessary.

The letter was sent by the regulator on April 15, that is, before the commencement of Lok Sabha elections in India. This time, the Lok Sabha elections will take place in seven phases, commencing on April 19 and concluding on June 1.

The date of counting has been set for June 4, 2024.

"This missive compliments the Election Commission MCC (Model Code of Conduct), which is similar to reporting mandates for banks over a defined threshold," said Mandar Kagade, founder and principal of Black Dot Public Policy Advisors.

However, he added that it's curious that the letter uses "suspicious/high-value" in its framing suggesting either large or suspicious transactions have to be reported. "Trustfully, PSOs will appropriately apply context in interpreting the letter and not flag transactions merely because they are high-value."

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