According to information obtained by The Indian Express, repeated transactions of comparable sums from a single digital payment wallet to several recipients are being monitored as a possible distribution of funds to influence voters in advance of elections.
The Election Commission (EC) issued instructions to banks, through the Department of Financial Services of the Finance Ministry, to prevent the misuse of electronic modes of payment that fall under the purview of the National Payments Corporation of India (NPCI), which includes the Unified Payments Interface (UPI). This instruction came after it was brought to the EC’s attention that there were instances of potentially distributing money to voters during the Karnataka Assembly election that took place the previous year.
The Department of Financial Services had written to the State Level Bankers’ Committee (SLBC) of Karnataka on April 13, 2023, in response to a letter from the Election Commission (EC), stating that “With the advancement of electronic modes of payments, the same may be used for transfer of money to influence the voters or to fund the candidates participating in the election.” This matter has been brought to the attention of the Election Commission of India, which has expressed concern and urged that this department take appropriate action as required.
It requested that the Sri Lankan Banking Corporation (SLBC) raise awareness among its member banks on the importance of reporting suspicious and high-value transactions to the appropriate authorities.
In addition to the elections in Karnataka, the same suspicious transactions were observed during a bye-election that took place not too long ago, as stated by a source within the Competition Commission. According to the source, banks in other states have been given directives that are comparable to those that have been given to banks in the run-up to the Lok Sabha elections.
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From a single payment wallet to several receivers in a short period of time, transactions ranging from around one thousand to two thousand rupees apiece were among the transactions that caused eyebrows to be raised.
In response to a question on how the Election Commission (EC) would combat the use of digital wallets for the distribution of money during the Lok Sabha elections, Chief Election Commissioner Rajiv Kumar announced at a press conference held in Chennai the previous week that he was unable to specify how the issue would be addressed. However, he did emphasize that the EC would maintain a vigilant watch.
Wallets are the means by which the banks will monitor the accounts from which the money is being transferred to various accounts. This is because the banks will be monitoring the wallets. A company known as the National Payments Corporations of India Ltd. would also be involved in the process of monitoring the transactions that take place through wallets. According to what Kumar had stated on February 24th, “If people try new ways of transferring money, we will also not be very far behind to catch them because all of the systems have been put in place.”
As the use of UPI transactions has become more widespread over the course of the past few years, the utilization of digital wallets as a means of exerting influence over voters has been a source of concern. During the course of the last five years, the amount of transactions conducted through the Unified Payments Interface (UPI) has climbed from 21.31 lakh crore in 2019-2020 to over 143 lakh crore in 2023-2024 (as of December 31, 2023), as stated in a Treasury Ministry response to Parliament on February 5.
