Allow gaming cos perform legitimate transactions: Meity to banks, fintechs

MeitY has told banks and fintechs to process refunds, vendor payments and GST filings for gaming companies, while ensuring smooth user transition after the real-money gaming ban

The government on Monday asked all the commercial banks and financial technology (fintech) service providers to allow gaming companies to perform legitimate transactions, such as processing refunds for users, making payments to vendors, and filing taxes, including the goods and services tax, a senior government official said.

 

The direction from the Ministry of Electronics and Information Technology (MeitY) came after the industry raised concerns around customer refunds and some other issues against the backdrop of the ban on real-money games (RMG).

 

“Some companies had flagged this issue. We have clarified to the extent that some of these legitimate transactions should be processed,” the official said.

 

Later in the day, representatives from the gaming companies met senior MeitY officials, including the Union Minister for Electronics and Information Technology Ashwini Vaishnaw, another official said.

 

“The government instructed the gaming companies that they should facilitate easy withdrawal of funds of users who have been impacted by the real-money gaming ban. The industry has taken steps to implement the prohibition. It will be ensured that the transition for the users is smooth,” the official said.

 

During Vaishnaw’s meeting with gaming companies, the minister also highlighted the importance of e-sports and social gaming as well as ways to promote both these segments, a third official said.

 

On August 19, the Union Cabinet approved the draft bill to ban all forms of real-money gaming in India. The bill was later tabled in the Lok Sabha on August 20 and in the Rajya Sabha on August 21, from where it was cleared on these dates, respectively. The law later received the President’s assent to become an Act.

 

The idea behind the Act was to promote e-sports and social games, while banning online real-money games altogether to prevent the rising instances of addiction to these games, especially among children and youth,

 

“If there is a choice between addressing a problem that impacts society at large and supporting an industry, the government will always address the large societal issue. There have been numerous instances where the financial losses incurred from these games have been substantial. There have also been instances of fraud. It was imperative for the government to take this action for the greater good of society,” Vaishnaw had said.

 

The Act has also proposed that any person who engages in or authorises funds used for real-money games will be punished with a jail term of up to three years, a fine of up to ~1 crore or both. People who repeat offences, such as the authorisation of funds for real-money games, may be convicted and sentenced to up to five years in prison, fined ~2 crore, or both, as proposed by the Act.

 

The administrative rules under the Gaming Act are also likely to be released soon, one of the officials quoted above said.