Yes Bank Crisis Not Limited To Withdrawal Limits; POS Machines, UPI, Cards Also Not Working
The restrictions imposed by the Reserve Bank of India RBI on Yes Bank may have far-reaching consequences to the economy. Most of the fintech offering this service including PhonePe and BharatPe had tie-ups with Yes Bank. Yes Bank accounted for more than 40% of all UPI transactions and also has the highest number of tie-up with third-party players.
The restrictions imposed by the Reserve Bank of India (RBI) on Yes Bank may have far-reaching consequences to the economy and is not just limited to the Rs 50,000 cash withdrawal limit for customers.
Even though the customers are allowed to withdraw up to Rs 50,000 many panicked customers who rushed to AMTs near them had to return disappointed as the cards did not work because the bank has been unplugged from payment networks.
This is not just bad news for individual customers, but for many businesses across the country.
According to RBI data, Yes Bank, which is the fourth largest private sector bank in the country has 92065 issued Point of sale (POS) machines, 8.27 lakh credit cards and 28.5 lakh debit cards to customers, which have also been taken off the payment networks.
The damage to the business does not end there. With digital payments especially through National Payments Corporation of India's (NPCI) Unified Payments Interface (UPI) picking up, QR code-based payments have become the norm.
But most of the fintech offering this service including PhonePe and BharatPe had tie-ups with Yes Bank. In fact, Yes Bank accounted for more than 40% of all UPI transactions and also has the highest number of tie-ups with third-party players on the platform.
As many as 21 third-party apps, including Angel Broking, Make My Trip, Cleartrip, Airtel, Swiggy, Redbus, Flipkart, Jabong, Myntra, PVR, PhonePe, Microsoft Kaizala and ShareiT have Yes Bank as their bank partner.
On Friday, PhonePe suffered a service disruption, which the company said on twitter was the result of an unscheduled maintenance activity.
We are temporarily unavailable.
¡ª PhonePe (@PhonePe_) March 5, 2020
We are going through an unscheduled maintenance activity. We apologize for any inconvenience this may cause.
We¡¯ll be back soon.
CEO and founder Sameer Nigam took to Twitter and said that "Our partner bank (Yes Bank) was placed under moratorium by RBI. Entire team's been working all night to get services back up asap".
Dear @PhonePe_ customers. We sincerely regret the long outage. Our partner bank (Yes Bank) was placed under moratorium by RBI. Entire team's been working all night to get services back up asap. We hope to be live in a few hours. Thanks for your patience. Stay tuned for updates!
¡ª Sameer.Nigam (@_sameernigam) March 6, 2020
By evening the company said that the service is back.
And we're back! pic.twitter.com/vJW23jLgTn
¡ª PhonePe (@PhonePe_) March 6, 2020
The company has now tied up with ICICI Bank for UPI transactions and it let users retain the Yes Bank UPI IDs after migration.
Reacting to the development, an NCPI spokesperson told The Economic Times that: ¡°We are a little worried about our members on UPI network and we expect RBI to come up with a speedy solution,¡± Vishwas Patel, chairman of Payment Council of India told ET. ¡°The panic and distrust could have easily been avoided. The overall impact from many fronts has created some systemic risks. However, we expect RBI to give out clarity that all payment networks and settlement which were on Yes Bank will go on as usual.¡±
Bobins Abraham is the Assistant News Editor at Indiatimes. He has more than twelve years of experience in TV and digital journalism. An avid student of history and geopolitics, he is a conservationist and environmentalist at heart. He writes on environment, sustainability, human-animal conflict and more.
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