Yes Bank Fallout: PhonePe, API Users Suffer Outage
Payment services provider PhonePe have suffered an outage after the Reserve Bank of India (RBI) on Thursday put Yes Bank under moratorium. Strangely, PhonePe, despite its big transactions is fully dependent on Yes Bank, as its payment gateway or payment services provider (PSP) and thus could not carry out any single transaction since Thursday evening. In addition, many users of Yes Bank's application programming interface (API) banking services are also facing severe issues in transactions. The moratorium on Yes Bank has also affected several small, cooperative banks that dependent on the crisis-hit lender for electronic inter-bank payment transactions.  
 
Immediately after the RBI announcement, PhonePe said its services were temporarily not available as it was going through an unscheduled maintenance activity. 
 
 
However, when the issue remain unresolved, Sameer Nigam, chief executive (CEO) of PhonePe said the issue was due to moratorium placed on Yes Bank by RBI.
 
 
According to an industry expert, the PhonePe case is self-inflicted disaster. “How can an UPI app have only one payment gateway? That too when NPCI encourages all UPI service providers to have as many PSPs as they can? In this case, PhonePe may have gone for PSP with lowest bidding or cheapest transaction rates with Yes Bank. But this is an important lesson for all other players in the market,” the expert, who does not want to be named, says. 
 
Yes Bank is payment service provider (PSP) of PhonePe. In addition, several unified payments interface (UPI) users with @ybl signature will not be able to carry out any financial transactions. This includes PhonePe, Swiggy, Flipkart, MakeMyTrip, Cleartrip, Airtel, RedBus, Microsoft Kaizala and Udaan among others. 
 
 
Here is the list of third party UPI apps and their PSP bank...
 
 
Source: NPCI
 
Yes Bank was the first in India to digitise business to business (B2B) supply chain with its API banking services. It allowed cash payment or receivable facility from any enterprise resource planning (ERP) system to businesses and also provided daily account settlement for easy reconciliation.
 
 
Out of the 1,303 banks that are live on national automated clearing house (NACH), 134 cooperative, district and urban cooperative banks are dependent on Yes Bank for their electronic inter-bank transactions. Yes Bank has 593 IFSC codes, data from the NPCI shows.
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    Lok Sabha passes Bankruptcy Code Amendment Bill
    The Lok Sabha on Friday passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019 amid an uproar by opposition members who demanded a discussion on the Delhi violence.
     
    The Bill was moved by Union Finance Minister Nirmala Sitharaman in the Lower House to amend the Insolvency and Bankruptcy Code, 2016.
     
    The Bill was passed without discussion amid sloganeering by opposition members.
     
    It is the third Bill to be passed this week by the Lok Sabha, including the Minerals Laws (Amendment) Bill, 2020, on Friday and Vivad se Vishwas Bill earlier on.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Yes Bank: Angry customers queue up branches, ATMs for cash
    Distressed and angry customers of the crisis-hit Yes Bank trooped outside scores of branches and ATMs in Mumbai, Thane, Pune, Nagpur and other cities on Friday to withdraw money after the RBI imposed curbs on withdrawal apart from other measures late on Thursday.
     
    Panicky customers rushed to the ATMs since late Thursday for withdrawals but many soon became dry, leaving them exasperated, especially in the suburbs and residential areas, and the scene was repeated on Friday morning in commercial areas of south Mumbai, Bandra Kurla Complex, Andheri, Lower Parel, etc.
     
    Besides, customers said certain UPI transactions which are on the Yes Bank PSP are reportedly not going through, all types of accounts are inaccessible even via netbanking, and many fintech players are hit badly.
     
    Mumbaikars are particularly peeved as the RBI orders came on the eve of the popular Holi festival on Monday, followed by Gudi Padva after a fortnight, the ongoing examination season when cash in hand is a necessity, not to mention the long weekend breaks thousands have planned in advance.
     
    A customer Vijay P. Singh said he drove down to the ATM in Kandivali suburb around 1 a.m. and was stunned to see at least 25 people in queue.
     
    "I went around 3-4 other ATMS between Dahisar-Malad with the same results and finally returned home at 4 am empty-handed... Even the online transactions are not on and the crowded branches offer little hope," Singh rued when contacted by IANS.
     
    Another shaken customer Vinod Panda from Navi Mumbai rushed to the Yes Bank Kharghar Branch but had to return disappointed as the bank was not willing to disburse even the promised Rs 50,000.
     
    "The officials informed me that I have to prove some emergency like medical or paying educational fees, etc... They claim that all problems will be resolved by next month, but assured that the online facility would be operational later today," a worried Panda told IANS.
     
    Ditto have been reports from many customers, including a retired teacher from Dadar who said that she transferred all her monies to the bank for convenience and now regrets it.
     
    Many agitated customers confronted the Yes Bank officials by comparing the crisis to the Punjab & Maharashtra Cooperative Bank imbroglio which erupted last September.
     
    However, the officials defended themselves by claiming that while the PMC Bank crisis was due to frauds, the Yes Bank was only a case of liquidity crunch which would be resolved within a month, and customers woes would ease.
     
    Given the state of the customers of PMC Bank with around a dozen deaths reported so far, there are few takers for the Yes Bank's arguments after the sudden developments last night.
     
    The Yes Bank has over 1,000 branches and 1,800-plus ATMs around the country which are under severe stress after the crisis erupted last night.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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