Banks and Fintech Firms Request Detailed RBI Guidelines for Implementing Online Money Gaming Ban

Banks and financial services firms recently met with the Department of Financial Services and the IT ministry. They requested detailed guidelines from the Reserve Bank of India (RBI) to enforce the ban on online money gaming. The firms also asked for additional time to establish mechanisms to comply with this ban, according to sources.

The government has prohibited all forms of online money gaming through the Promotion and Regulation of Online Gaming Act. This action follows numerous complaints about individuals committing suicide due to significant financial losses. During the meeting, discussions focused on understanding the Act's provisions and how banks and financial services companies plan to implement them.

Implementation Challenges and Requests

Participants in the meeting explored transitional measures and potential challenges in implementing the Act's provisions. Everyone agreed to implement it but sought specific guidelines from the RBI. They also requested time for backend compliance mechanisms to be established, an official source noted.

The government is currently in the process of notifying the Act, after which rules for its implementation will be introduced. The Act aims to prohibit advertisements related to online money games and prevents banks and financial institutions from transferring funds for such games.

Penalties and Compliance

Advertising money games can lead to imprisonment for up to two years or a fine of up to Rs 50 lakh. Facilitating financial transactions related to these games may result in imprisonment for up to three years or a fine of up to Rs 1 crore. Repeat offences carry harsher penalties, including imprisonment for 3-5 years and fines up to Rs 2 crore.

Meanwhile, major players in the online money gaming industry have aligned with the government's decision by voluntarily shutting down their money-based gaming services. However, the government still faces challenges in controlling foreign-based online money gaming and betting platforms.

Impact on Society

An estimated 45 crore people in India have collectively lost around Rs 20,000 crore in a year due to addiction to online money games. This highlights the significant impact these games have had on individuals and society as a whole.

The meeting underscored the need for comprehensive guidelines from RBI and additional time for firms to adapt their systems. As the government moves forward with implementing this Act, addressing foreign platforms remains a critical challenge.

With inputs from PTI