RBI’s Caution against Carpooling app ‘sRide’

On February 23, 2022, the Reserve bank of India (RBI) cautioned public against carpooling app sRide.

Why RBI caution against sRide App?

  • RBI caution against sRide App, stating that this firm was operating a semi-closed pre-paid instrument, without receiving authorization from the central bank, under Payment and Settlement Systems Act, 2007.
  • sRide Tech Private Limited is a registered company, with registered office in Gurgaon, Haryana. This company is operating a semi-closed (non-closed) pre-paid instrument (wallet) through its ‘sRide’ carpooling app.
  • Thus, RBI cautioned that persons dealing with the app will be doing at their own risk.

sRide App

sRide app is a carpooling mobile application, that connects people within the community to share rides. The app help users in sharing the cost of travel, increase mobility, reduce travel time, and build communities. The app also helps in using existing infrastructure, reducing parking needs, traffic and emissions for cities and organisations.

Payment and settlement systems in India

In India, payment and settlement systems are used for financial transactions. They are covered under Payment and Settlement Systems Act, 2007 (PSS Act), Reserve Bank of India and Board for Regulation & Supervision of Payment & Settlement Systems regulate it. India has multiple payments and settlement systems, including gross and net settlement systems.

Gross settlement

For Gross settlement, India has a real-time gross settlement (RTGS) system.

Net settlement systems

For net settlement systems, India has Electronic Clearing Services (ECS Credit), credit cards, debit cards, Electronic Clearing Services (ECS Debit), Immediate Payment Service, National Electronic Fund Transfer (NEFT) system and Unified Payments Interface (UPI).

Real-time gross settlement (RTGS) systems

RTGS systems are specialist funds transfer systems, in which money or securities is transferred from one bank to any other bank in “real-time” and on “gross” basis. Settlement in “real time” means that, transaction is not subjected to waiting period. Transactions are settled as soon as they are processed. “Gross settlement” means the transaction is settled without bundling or netting, on a one-to-one basis.

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