PhonePe suffers outage after RBI moratorium

Users of fintech platform PhonePe have complained that they are unable to make transactions after the RBI placed a moratorium on Yes Bank on Thursday. Several users transact with PhonePe’ UPI and wallet services.

The Reserve Bank of India (RBI) on Thursday placed Yes Bank under moratorium and restricted withdrawals to Rs 50,000, as the central bank assumed control of the troubled private sector lender.

Users transacting on PhonePe received the following messages:

We are temporarily unavailable.
We are going through an unscheduled maintenance activity. We apologize for any inconvenience this may cause.
We’ll be back soon.

India’s UPI (Unified Payment Interface) transactions might take a hit for a month or two as the banking regulator has placed Yes Bank under moratorium according to fintech analyst firm ibsintelligence.

Yes Bank accounted for 40% of all UPI transactions, the largest share by far. Despite its financial troubles, Yes Bank had 514 million transactions in January 2020. The total UPI transactions stood at 1.31 billion in January 2020, according to data from the National Payments Corporation of India (NCPI). Yes Bank has over 20 such partnerships with third-party applications according to the NPCI.

Expressing regret at the outage, PhonePe CEO Sameer Nigam tweeted: “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!”

Earlier on Thursday, the government had in a gazette notification said, no person can withdraw an amount in excess of Rs 50,000 crore from the bank from March 5 to April 3 irrespective of the number of accounts he/she holds.

“The central government hereby also directs that during the period of moratorium, the Yes Bank Limited, Mumbai, Maharashtra (the said banking company) shall not, without the permission in writing of the Reserve Bank of India make, in the aggregate, payment to a depositor of a sum exceeding Rs. 50,000 lying to his credit, in any savings, current or any other deposit account, by whatever name called," the notification by the government said.

Later in the evening, the RBI said that entire board of the Yes Bank has been superseded and Prashant Kumar, ex-DMD and CFO of State Bank of India has been appointed as the administrator under Section 36ACA (2) of the Act.

On Friday, Yes Bank shares were down 50 percent, trading at Rs 18.40 at 11:04 am.