India
working to fix e-commerce payments post-Uber case:
central bank governor
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[December 27, 2014]
By Suvashree Choudhury
MUMBAI (Reuters) - U.S. taxi-hailing
company Uber Technologies violated Indian regulations by "bypassing"
rules when it used an overseas gateway to conduct transactions in the
country, Reserve Bank of India Governor Raghuram Rajan said in a
television interview.
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The central bank is working to set a legal framework for the use of
advanced e-commerce technologies but in the meantime no one can
treat the absence of a solution as an excuse to violate Indian
rules, Rajan told NDTV television.
"We are willing to work to try and solve the problem, in fact we
have some solutions which are coming up on doing low value
transactions without too much 'jhanjhat' (hassle) as they call it,"
Rajan said in the interview telecast on Friday night. "But the point
is you cannot violate regulations."
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Earlier this year, local taxi companies complained that Uber - which
directly processed payments using a customer's stored credit card
information - was not following India's two-step verification for
all e-commerce transactions.
In August, the RBI instructed that by Oct. 31, all transactions done
with domestic credit cards had to follow the two-step verification
process.
After the RBI order, Uber changed its payment method and partnered
with an India-based virtual wallet provider, Paytm.
"One of the things we need to do to avoid crony capitalism is have
rule of law. So our point was obey our regulation, we will work with
you to fix it, to make it more useful for you," Rajan said.
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Uber did not respond to request for comment on the governor's
remarks.
At present, Uber is not operating in New Delhi. On Dec. 8, the
Indian government banned Uber from operating in the capital after
one of the company's drivers was arrested for allegedly raping a
female passenger.
(Additional reporting by Devidutta Tripathy; Editing by Richard
Borsuk)
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