Daybreak How the Pahalgam attack sent banks scrambling to clean up digital payments
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May 15, 2025 Rona Kumar Gunjan, a journalist from The Ken, dives into the chaos following the Pahalgam terror attack and its shockwaves through India's digital payments landscape. She discusses the urgent regulatory crackdown on suspicious online activities linked to terror funding, revealing how banks and payment aggregators are scrambling to enhance their oversight. Rona highlights the roles of technology service providers in ensuring compliance and the challenges merchants face amidst increased scrutiny. Plus, she sheds light on the dangerous world of dubious merchants that threaten consumer trust.
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Pahalgam Attack Sparks Bank Fear
- Two days after the Pahalgam terror attack, an HDFC Bank exec feared regulators "may come for us now."
- This led to intense government scrutiny of suspicious digital payments to trace terror funding.
Banks Held Responsible for Merchants
- Terror funding can hide behind seemingly normal online payments passing through payment aggregators.
- Regulators hold banks accountable for illegal merchant activities, not the merchants themselves.
Regulatory Crackdown Spurs Demand
- After scandals and attacks, regulators aggressively enforce digital payment scrutiny.
- Merchant screening firms have seen their workloads multiply, doubling or even quintupling in weeks.