India’s Central Bank, Reserve Bank of India (RBI) today took time to warn online marketplaces like Flipkart, Amazon, PayTM to strictly follow its 2009 guidelines on settlement of payments for electronic payment transactions involving intermediaries.
RBI’s clarification came after a vendors’ body complained to the bank alleging late payments by the Indian ecommerce companies.
In addition to the warning, RBI has also asked the All India Online Vendors Association, which had submitted its complaint about delayed payments by ecommerce platforms such as Flipkart, Amazon and Paytm in August this year, to raise specific cases of violations with it for evaluation.
According to the 2009 guidelines, the settlements must be made in two-three days from the day of intimation of the completion of transaction as agreed upon by both parties, which is referred to as T+2, T+3 in the industry. However, according to the complained filed by All India Online Vendors Association, the settlements took more than T+15 days and that the money was not being kept in escrow accounts.
In its complaint dated August 24, the association said, “We would like to point out that our association has received numerous cases where money has been held by marketplaces for an indefinite period due to various reasons.”
Responding to the association’s complaint, RBI said, “All payments to merchants which do not involve transfer of funds to nodal banks shall be effected within a maximum of T+2 settlement cycle”, while payments to merchants “involving nodal banks shall be effected within a maximum of T+3 settlement cycle”.
In August, RBI identified platforms such as Flipkart and Amazon as intermediaries which come under the purview of the guidelines in response to a query under the Right to Information Act.
Talking to Economic Times, Flipkart and Amazon stuck with their narratives and said they had always adhered to the 2009 guidelines decided by the RBI.
While Amazon highlighted that it has always followed the RBI guidelines of T+3 settlement cycles for all sellers, Flipkart, on the other hand, revealed that its payments are done based on dispatch and payouts are done in seven to 15 days after dispatch depending on which tier the seller is categorised under.
[Image: The Financial Express]