United Bank Of India Stops Users From On Devices AePS Transactions By Private Banks

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Kolkata-based public sector lender United Bank of India (UBI) has stopped Aadhaar-enabled payment system (AePS) transaction for its users on devices installed by private banks such as IDFC Bank, IndusInd Bank, RBL Bank and YES Bank. UBI alleges the business correspondents (BCs) of these banks for round-tripping funds.

AePS allows customers mostly in in far flung areas to carry out transactions through a micro ATMs through the business correspondents of any bank using the Aadhaar authentication. It is mostly meant for those who are not comfortable with smartphones or debit cards.

The Economic Times quoted a public sector banker as stating that BCs were resorting to round-tripping of funds through the micro ATMs and earning commission for each transaction in the process.

United Bank of India Stops Users From On Devices AePS Transactions By Private BanksImage source: United Bank of India

With the above in effect, now the user having accounts in the aforementioned private sector banks cannot do transactions through United Bank of India via AePS.

Responding to the UBI’s move, these private banks have reportedly written to the National Payments Corporation of India (NPCI), the nodal body for AePS transactions, and also forwarded the letter to Reserve Bank of India (RBI) seeking intervention.

Source: INC42

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