Digital wallet MobiKwik announced that it will be offering a annual 'profit' of 6% on user's accounts whose balance is above Rs 5,000. Technically this profit is the interest earned on funds stored in bank escrow accounts. A close reading of the Reserve Bank of India's guidelines for wallets says that a 'core portion' of the funds in escrow accounts can be taken out to a separate account on which interest is payable. However, these funds need to be in business for one year and duly audited . From the RBI guidelines: The entity can enter into an agreement with the bank where escrow account is maintained, to transfer "core portion" of the amount, in the escrow account to a separate account on which interest is payable, subject to the following: 1. The bank shall satisfy itself that the amount deposited represents the "core portion" after due verification of necessary documents. 2. The amount shall be linked to the escrow account, i.e. the amounts held in the interest bearing account shall be available to the bank, to meet payment requirements of the entity, in case of any shortfall in the escrow account. 3. This facility is permissible to persons who have been in business for at least ONE YEAR and whose accounts have been duly audited for the full accounting year. 4. NO LOAN is permissible against such deposits. Banks shall not issue any deposit receipts or mark any lien on the amount held in such form of deposits. 5. Core portion as calculated…
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