Post-Uber case: RBI working to fix e-commerce payments

FILE - This Friday, Nov. 21, 2014 file photo taken in Newark, N.J., shows smartphones displaying Uber car availability in New York. With assault cases against their drivers in India and Chicago this week, popular ride-hailing app Uber is in for yet another public relations ordeal that follows ongoing criticisms about its corporate ethics and culture. And yet, neither government nor the taxi industry has regulators been able to curb the companyÃÆÃâÃâ Ã¢â¬â¢ÃÆââ¬Å¡ÃââÃÆÃâÃââÃÆââââ¬Å¡Ã¬Ãâ¦Ã¡ÃÆââ¬Å¡ÃâìÃÆÃâÃââÃÆââââ¬Å¡Ã¬Ãâ¦Ã¾ÃÆââ¬Å¡Ãââs meteoric growth, one that has spurred an entire industry. (AP Photo/Julio Cortez, File)

The Central Bank is working to set a legal framework for the use of advanced e-commerce technologies. But, in the meantime, no one could treat the absence of a solution as an excuse to violate Indian rules, Reserve Bank of India (RBI) Governor Raghuram Rajan told a news channel on Friday night.

“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,” Mr. Rajan said. “But the point is you cannot violate regulations.”

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 October 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,” Mr. Rajan said.