Unified payments interface (UPI)-based transactions of several fintech apps were severely affected after the Reserve Bank of India (RBI) imposed a moratorium on Yes Bank account holders on Thursday.
Walmart owned PhonePe was affected the most on account of its exclusive partnership with Yes Bank for UPI transactions.
“We sincerely regret the long outage. Entire team's been working all night to get services back up asap. We hope to be live in a few hours,” Sameer Nigam, CEO of PhonePe, said on Twitter.
Dear @PhonePe_ customers. We sincerely regret the long outage. Our partner bank (Yes Bank) was placed under moratorium by RBI. Entire team's been working all night to get services back up asap. We hope to be live in a few hours. Thanks for your patience. Stay tuned for updates!— Sameer.Nigam (@_sameernigam) March 6, 2020
Payment app Razorpay, which also uses Yes Bank’s platform for its back-end operations, was impacted severely, an industry source said.
However, Razorpay tweeted that its payment gateway service was unaffected. “While some other services may get affected, our team is reaching out to the affected businesses via email. Our team is working to ensure there is no disruption in services,” it said.
Update on Yes Bank being placed under moratorium by RBI.— Razorpay (@Razorpay) March 5, 2020
Our payment gateway services are unaffected. While some other services may get affected; our team is reaching out to the affected businesses via email.
Our team is working to ensure there is no disruption in services.
Online brokerage firm Zerodha’s founder and CEO Nitin Kamat said that the platform has cancelled fund withdrawal requests from Yes Bank account holders.
“We have cancelled all fund withdrawal requests made by clients to their Yes Bank accounts so that the money doesn’t get blocked. Please change, if your primary bank account is Yes (Bank), to any other and withdraw the funds,” Kamat said.
"The Yes Bank moratorium will have a short-term, but significant impact on fintech startups. Primarily because Yes Bank, one of the most digital-friendly banks, was the biggest bank for fintech companies. Startups like PhonePe, which were heavily dependent on Yes Bank for banking, escrow accounts and payment gateways, have been paralysed. However, fintechs are going into overdrive to get a temporary solution by the weekend,” Bala Parthasarathy, CEO and co-founder of MoneyTap, told TechCircle.
On Thursday, the RBI imposed a limit on Yes Bank, restraining customers’ withdrawal power to Rs 50,000 till April 3, as it failed to maintain enough capital. However, the central bank also issued relaxations in exceptional cases such as weddings and for medical expenses.
The RBI has appointed Prashant Kumar, former deputy managing director at State Bank of India (SBI), as Yes Bank’s administrator. Kumar has earlier worked in various departments of SBI, such as credit, human resources and training systems, and was the chief general manager of the state-owned bank.
Last year, Yes Bank launched an API (application process interface) sandbox, which allows its partners to use banking functions in their own corporate solutions. It claimed that the platform had 50 APIs as of November, higher than APIs offered by an Indian bank.