Economy
BHIM UPI: NPCI says it won’t be responsible for loss or fraud, user fully takes the risk
National Payments Corp of India (NPCI), which is set up as a Section 25 company under the Companies Act 1956 (now Section 8 of Companies Act 2013), and is seen promoting its Unified Payments Interface (UPI)- based Bharat Interface for Money application (BHIM) app, says it should not held responsible for any loss, claim or damage suffered by the user. What is more shocking are the terms and conditions (T&C) for the UPI BHIM app from NPCI, which are one sided and affords no protection whatsoever to the end user or consumer. 
 
In its terms and conditions for use of the BHIM UPI app, the company, promoted by 10 banks, says, "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application. The user agrees and acknowledges that NPCI shall not be liable and shall in no way be held responsible for any damages whatsoever whether such damages are direct, indirect, incidental or consequential and irrespective of whether any claim is based on loss of revenue, interruption of business, transaction carried out by the user, information provided or disclosed by issuer bank regarding user’s account(s) or any loss of any character or nature whatsoever and whether sustained by the User or by any other person. While NPCI shall endeavour to promptly execute and process the transactions as instructed to be made by the user, NPCI shall not be responsible for any interruptions, non-response or delay in responding due to any reason whatsoever, including due to failure of operational systems or any requirement of law."
 
 
The T&C of NPCI are not easily available and one needs to search for it. But whatever is stated in the T&C documents, appears completely one-sided. Take for example point 6.2 in the T&C documents, which emphasises that only the user is responsible for any failed transaction or any loss and neither NPCI nor the bank can be held responsible. It says, "NPCI shall not be liable for any loss, claim or damage suffered by the User and/or any other third party arising out of or resulting from failure of any transaction initiated via BHIM App on account of time out transaction i.e. where no response is received from NPCI or the beneficiary bank to the transaction request. NPCI or the beneficiary Bank shall also not be liable for any loss, damage and/or claim arising out of or resulting from wrong beneficiary details, mobile number and/or account details being provided by the User." 
 
This means, even if NPCI or the bank fails to send the necessary response, it is the user who is liable for the loss. Therefore, NPCI, the developer and promoter of this UPI BHIM app, and banks on its platform, are under no obligation to send responses to these transactions within time. "NPCI shall not be responsible for any electronic or mechanical defect, data failure or corruption, viruses and bugs or related problems that may be attributable to User telecommunication equipment and/ or the Services provided by any Service Provider," NPCI says.
 
Remember the Bank of Maharashtra case, where fraudsters siphoned off Rs25 crore from the lender, using a bug in its UPI app? For such kind of misuse, too, NPCI says the payer is responsible. It states, "The Payer is solely responsible for the accuracy and authenticity of the payment instructions issued via BHIM App. Once a payment instruction is issued, the same cannot be subsequently revoked by the Payer. NPCI accepts no liability for any consequences arising from erroneous information provided by Payer in payment instructions."
 
Now, let us see what happened in the Bank of Maharashtra case (Read: UPI bug costs Bank of Maharashtra about Rs25 crore). P Hota, Managing Director and Chief Executive of NPCI, told the Economic Times that the Pune-based bank had procured an UPI solution from a vendor (reported to be city-based InfrasoftTech), which had a bug that resulted in the fund moving out of the accounts without the sender's account having the necessary funds.
 
As per the procedure, when the UPI app receives such a request, it sends a query to the other party (customer) and, after obtaining acceptance, it checks fund availability in the UPI-linked bank account. However, the UPI app used by Bank of Maharashtra sent two messages to NPCI, one as 'success' and other as 'error:insufficient funds'. In these fraudulent transactions, NPCI only read the first message and cleared the payment.  
 
This is an interesting situation because the money was taken from accounts which did not have necessary funds. So, who will bear the loss? As per NPCI's T&C, it cannot be the company or the bank, but the user. However, in this case, the user was not even aware about this fund transfer. In addition, NPCI is not under any obligation to keep a record of instructions, making the job of the investigation agencies difficult.
 
In its T&C documents, NPCI states that it has no liability or obligation to keep a record of the instructions to provide information to the user or for verifying the instructions. "All instructions, requests, directives, orders, directions, carried out by the User via BHIM App, are based upon the User’s decisions and are the sole responsibility of the User," it says.
 
After making claims that over one crore users have downloaded the BHIM app from Google Play Store, the government is now trying to boost its actual use. The government has come out with a customer referral scheme, which promises to pay Rs10 per reference to the referrer and Rs25 for the new user for downloading and transacting from BHIM app. But this will happen only on completion of three unique transactions of Rs50 in total to any three unique customers or merchants.
 
Here is the copy of the T&C of NPCI for UPI BHIM app…
 

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COMMENTS

krishna

6 months ago

BOM became cashless!

Sudesh Pratap

6 months ago

I am surprised that people are surprisingly talking about UPI and NPCI in this regard. Have you come across any app or any service provider taking responsibility ? Unfortunately it includes all apps, the ISPs including social media platforms like twitter-facebook etc. This is the risk for the user/consumer likeall others.

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

Peeyush Agarwal

6 months ago

It's concerning... I understand that anything can be hacked... I understand that NPCI can not be made responsible for anything and everything like BOM issue... But how can the they use following words... "NPCI does not hold out any warranty and makes no representation about the quality of the UPI services or BHIM application"...??? At least for the APP or any wrong action by app is your responsibility and you can not deny it under common law, whatever you put as a person precondition in T&C... This will only hamper its popularity... one side GOI n RBI claim that BHIM n UPI are extremely safe... Government of India and RBI should look into it urgently...

jaideep shirali

6 months ago

Not surprised by the conditions, I would be glad to know one government department or undertaking that takes responsibility for anything. Banks charge us for the 'safe deposit' lockers, but legally they have no responsibility if anything happens to the locker contents! BMC takes no responsibility for the potholes. Why deny NPCI this opportunity to take all the credit and none of the blame ?

REPLY

Gupta

In Reply to jaideep shirali 6 months ago

:-)

Gupta

In Reply to jaideep shirali 6 months ago

:-)

CEA Subramanian calls FRBM panel fiscal deficit targets 'arbitrary'
New Delhi, In his dissent note to the Fiscal Responsibility and Budget Management (FRBM) Review Committee report, Chief Economic Adviser (CEA) Arvind Subramanian has described the fiscal deficit targets suggested by the committee as "arbitrary". Adherence to it will aggravate "booms and busts" in the economy, he has said.
 
The committee headed by former Revenue Secretary N.K. Singh, whose report was made public on Wednesday, has recommended that the fiscal deficit should be brought down to 2.5 per cent of the gross domestic product (GDP) by the financial year 2023 in a phased manner. 
 
It has also suggested a revenue deficit of 0.8 per cent and a combined Centre-state debt-to-GDP ratio ceiling of 60 per cent for fiscal 2022-23, which is the end point of its medium-term fiscal road map. 
 
"The new architecture would be a corset on fiscal policy, resulting in extreme procyclicality -- aggravating booms and busts -- with adverse effects on the economy," Subramanian wrote in his dissent note.
 
"There is a problem (with the targets) because multiple targets force policymakers to aim at too many, potentially inconsistent objectives and analytical frameworks, running the risks of overall fiscal policy being difficult to communicate for the government and comprehend for market participants," he said.
 
The CEA suggested the focus should be on the primary deficit until the fiscal deficit is entirely eliminated.
 
"This strategy will ensure that debt will remain on a downward path even over the longer term, when India's debt dynamics turn less favourable," he said.
 
"This would ensure a declining debt trajectory, which would reassure investors and ensure that India's debt remains sustainable even when India's debt dynamics turn less favourable in the medium term," he added. 
 
He said the "escape clause" should have a "more reasonable growth trigger that allows for some relaxation of the deficit targets during recessions, and some tightening of these targets during booms."
 
"Such a simple, clear, and consistent architecture would truly be an FRBM for the 21st century."
 
India's fiscal deficit in the April-February period of the last fiscal ended March 31 touched Rs 6.06 lakh crore or 113.4 per cent of Budget Estimates for 2016-17 -- as against 107.1 per cent of Budget in the same period of last year, government data showed last month.
 
The government had set the target of restricting the 2016-17 fiscal's deficit at 3.5 per cent of the GDP, or to Rs 5.34 lakh crore.
 
In a move to support higher government spending in this fiscal, Finance Minister Arun Jaitley has pegged the fiscal deficit target at 3.2 per cent of the country's GDP in his Budget 2017-18. 
 
The figure is higher than the earlier targeted figure of 3 per cent of the GDP for 2017-18. The target for 2018-19 has been set at 3 per cent.
 
The FRBM Act, 2003, is designed to institutionalise financial discipline, reduce fiscal deficit, improve overall management of public funds by moving towards a balanced budget and strengthen fiscal prudence. 
 
The Act's main purpose was to eliminate revenue deficit of the country and bring down the fiscal deficit to a manageable 3 per cent of the GDP by March 2008, but this deadline got postponed due to the global financial crisis that unfolded late in 2007.
 
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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Growth bottoming out for top corporates; Recovery to be slow: Report
Given decelerating earnings before interest, tax, depreciation and amortization (EBITDA) growth of corporates with weak operating performance, India Ratings and Research (Ind-Ra) says it does not expect a broad-based recovery in FY2018. 
 
"Although the profitability of some corporates have bottomed out, we remain cautious as signs of a broad-based recovery are yet to be reflected in the financial performance of the majority of corporates. Corporates with strong financial profiles are likely to witness a marginal positive EBITDA growth in FY2018 compared with corporates with weak financial profiles, which are likely to witness a significant decline in EBITDA growth in FY2018," the ratings agency said in a report.
 
 
Ind-Ra expects FY2018 earnings (EBITDA) growth of the top 365 corporate borrowers, excluding public sector units and banking and financial services providers, to be 9%-12%, driven by slow but improving consumption and a recovery in exports. It says, "The level would be the highest since FY2015 (8%). Therefore, the number of corporates showing an improvement in operating performance is likely to be higher than that in FY17. We expect FY2017 EBITDA growth to be lower than the previously estimated 5%-6% owing to demonetisation in 4QFY17. However, the impact of demonetisation is likely to be transitory on the FY2018 corporate performance."
 
 
According to the ratings agency, consumption would be the key support for recovery. It says, "Although private sector investment has continued to weaken, higher government expenditure and consumption have supported corporate profits in the past two years. Assuming normal monsoons, we expect EBITDA growth in FY2018 to benefit from an improvement in rural consumption. Consumption is also likely to receive a boost from salary hikes due to the Seventh Pay Commission."
 
 
As per the Central Statistics Office (CSO), nominal government final consumption expenditure (GFCE) is expected to grow 22% in FY2017, from 8.8% recorded in FY2016, and nominal private final consumption expenditure (PFCE) to grow 11.9%, compared with 8.6% in FY2016.
 
Ind-Ra sees rising commodity prices to result in improved exports. "Although Indian rupee has strengthened, an improvement in global demand and a rise in crude and commodity prices, have led to a slow recovery in exports since September 2016. In the past, exports declined for consecutive 20 months (December 2014-August 2016). We expect exports to regain traction in FY2018, thereby improving the nominal income growth of most exporting sectors," it added.
 
 
Ind-Ra says its expectation for FY2018 remains in line with the trend for FY2017. It expects the EBITDA growth of capital-intensive- and commodity-linked sectors, including infrastructure and power, to decelerate in FY2018.
 
The steel sector registered positive EBITDA growth for first nine months of FY2017, driven by an increase in commodity prices and base effect. Ind-Ra expects the steel sector's profitability in FY2018 to remain under pressure, as companies' ability to fully pass input prices to customers would be limited owing to muted demand and overcapacity.
 
Meanwhile, the telecom sector registered flat EBITDA growth for the first nine months of FY2017. Ind-Ra expects the sector's EBITDA growth to decelerate in FY2018. Ind-Ra has a negative outlook for the telecom, steel, power and infrastructure sectors for FY18.
 
In the oil and gas sector, downstream companies could witness a moderation in EBITDA margin in FY2018 on an increase in crude prices, the ratings agency says, adding, on the other hand, that upstream companies are likely to benefit from benign prices. However, the agency expects consumption- and export-driven sectors, such as pharmaceuticals, to register positive EBITDA growth for FY18.
 
The auto sector's EBITDA growth in FY18 is likely to be moderate. Meanwhile, automotive suppliers are likely to benefit from an increase in commodity prices and an improvement in exports.  Ind-Ra has a stable outlook on the auto and automotive supplier sectors for FY18.
 

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COMMENTS

Bapoo Malcolm

6 months ago

Aache Din ayee aur Aache Din Gayee. Like the bullet trains. So fast that one cannot see them. And did anyone promise that Aachey di rahengay? Somebody joked the other day that now let's look forward to Aachey Raat; but is it possible with the myriad bans?

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