Track dubious transactions, RBI tells payments companies

MUMBAI: RBI has asked payments companies to track suspicious transactions that may be being used to influence voters. RBI has cited concerns raised by the Election Commission on digital distribution of funds during elections.
“Various electronic modes of payments have the potential to be used for transfer of funds to influence the voters or to fund the candidates participating in the elections.The ECI has raised this concern and suggested that suitable action, as required, may be taken,” the RBI said in its communication. The letter names Andhra Pradesh, Arunachal Pradesh, Odisha and Sikkim which are covered under the first phase of polling.
Traditionally, the onus of monitoring suspicious transactions lie with the banks. However, the entry of payment system operators enables users to send funds from multiple accounts to send money to many accounts. This makes it possible to splice the funds, a process termed as smurfing, to enable fund transfers without triggering anti-money laundering alerts.
To keep a check on cash distribution, the Election Commission has been adopting a standard operating procedure. This involved deploying flying squads, static surveillance teams at locations, and video recording of gatherings. However, this time, the EC has expressed concern over the use of digital payments to bribe voters.

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