PhonePe services hit as partner Yes Bank collapses

After banking partner Yes Bank was put under restriction by the Reserve Bank of India on Thursday evening, payments firm PhonePe suffered an outage. PhonePe users were unable to pay using the platform. The platform acknowledged the outage and said that the services were temporarily unavailable but did not say that it was due to the restrictions on its banking partner. "We are temporarily unavailable. We are going through an unscheduled maintenance activity. We apologize for any inconvenience this may cause. We will be back soon," it had stated late night on Thursday.

We are temporarily unavailable. We are going through an unscheduled maintenance activity. We apologize for any inconvenience this may cause. We’ll be back soon.

— PhonePe (@PhonePe_) March 5, 2020

On Friday morning, founder and CEO Sameer Nigam acknowledged that the outage was due to the RBI restrictions on Yes Bank. "Our partner bank (Yes Bank) was placed under moratorium by RBI. Entire team's been working all night to get services back up asap," it stated PhonePe is a UPI-based payments system and digital wallet company based in Bengaluru. Founded in 2015, PhonePe was acquired by Flipkart in 2016 to build its payment business. On Thursday evening, RBI placed restrictions on cash withdrawal for Yes Bank customers. The apex bank capped withdrawals for depositors at Rs 50,000. RBI superseded the Yes Bank board and appointed Prashant Kumar as the administrator of the bank. The RBI stated that it is satisfied that it must issue certain directions to Yes Bank to protect the interest of the depositors. Yes Bank will also not be able to renew or grant a loan or make any investment or transfer any of its properties or assets. The apex bank also assured the depositors that their money would be fully protected. "The Reserve Bank will explore and draw up a scheme in the next few days for the bank's reconstruction or amalgamation and with the approval of the Central Government, put the same in place well before the period of moratorium of thirty days ends so that the depositors are not put to hardship for a long period of time," the RBI said. Source:Business Today