The Reserve Bank of India (RBI) has directed e-commerce marketplaces to ensure that payments to merchants are processed within two days after the transaction has been completed, i.e., after customer has made the payment, reports The Times of India. As of now, most online marketplaces take about 7-14 days to clear payments. This directive is in response to a complaint filed by the All India Online Vendors Association (AIOVA) regarding repeated delays in payment clearance from marketplaces. In 2009, the RBI had issued guidelines regarding "settlement of payments for electronic payment transactions involving intermediaries" under Section 18 of the Payment and Settlement Systems Act, 2007. As per the guidelines: 4.1 The final settlements of funds to the merchants are presently guided by business practices followed by the intermediaries/merchants. In order to increase the efficiency of the payment process, it is necessary that banks transfer funds to the ultimate beneficiaries with minimum time delay. It is therefore mandated that banks shall implement the following settlement cycle for all final settlements to merchants. This settlement arrangement shall be implemented within three months of issuance of this circular:- 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 (where T is defined as the day of intimation regarding the completion of transaction). All payments to merchants involving nodal banks shall be effected within a maximum of T+3 settlement cycle. An Amazon India spokesperson told MediaNama that it follows the RBI…
