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BankingNABARD / RBI

Payout APIs: RBI Probe into Money Laundering Misuse

24 November 20251 min read
BANKING & FINANCEPayout APIs: RBIProbe into MoneyLaunderingMisuse24 November 2025safalsetu.com

Why in the news

RBI examined the abuse of bulk-payment interfaces to move illicit funds with weak checks.

Key facts

  • Misuse: unregulated TSPs exploiting bank payout APIs.
  • Payout API: software interface from banks for automatic bulk transfers, handy for payroll, vendor payments and refunds.
  • Features: automation, thousands of beneficiaries per request, bank, UPI or wallet channels, ERP integration and no repeated OTP.
TypeUse
Cross-borderInternational remittance
OnlineCustomer or vendor payments
Offline / POSStore payments via PoS or UPI soundbox

Exam angle

  • Regulator: RBI.
  • Terms: payout API, TSP, KYC, UPI soundbox.

Test yourself

1. Which regulator was investigating money laundering through bank payout APIs, as per the Payout APIs notes?

RBI is looking into the sharp rise in such laundering.

2. Who were accused of misusing bulk-payment payout APIs by posing as fintech companies?

Unregulated TSPs were exploiting them.

3. Which is a stated feature of a payout API?

It supports hundreds or thousands of beneficiaries per request.

This topic is part of Daily Current Affairs 23 & 24 November 2025 (15 topics).

All topics of the dayDay quizNovember 2025

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