United Bank of India has blocked Aadhaar Enabled Payment System (AEPS) transactions for its users on micro ATMs installed by private banks since April for alleged round tripping by Business Correspondents of private lenders. Consequently, these private banks wrote to the National Payments Corporation of India (NPCI) in protest to the move taken by United Bank and the NCPI, in turn, has forwarded the letter to Reserve Bank of India seeking the regulator's intervention, the report said. The development was reported by the Economic Times. United Bank triggered the move as they had to pay ‘huge sums’ of money as interchange fees because business correspondents of private banks were round tripping funds through the micro ATMS and in turn, earning commission for each transaction, the ET report said quoting a senior public sector banker. Some banks have had to pay around Rs 1 crore in interchange fee in the quarter ending March (FY18), while they were earning close to a mere Rs 4000 from other banks for the same, the officials told ET. The banker went on allege that in some cases about 20 accounts, credit and debit simultaneously in a single day, which suggested unusual customer behavior. the ET reported. He explained the modus operandi of these business correspondents - “These BCs do Rs 3000 credit and debit since that is the optimum amount that helps the interchange to reach Rs 15 per transaction and they get the maximum allowed commission,” the public sector banker told ET. Round Tripping…
