MeitY Urges Banks and Fintechs to Allow Gaming Companies to Process Legitimate Transactions

On September 1, 2025, the Ministry of Electronics and Information Technology (MeitY) instructed Indian banks and financial technology (fintech) service providers to facilitate legitimate financial transactions for gaming companies. These include processing refunds for users, vendor payments, and goods and services tax (GST) filings, amidst the growing concerns after the real-money gaming (RMG) ban in India.

Gaming Industry's Concerns Following the RMG Ban

The Indian government’s recent ban on real-money games has created uncertainty for gaming companies. Industry players expressed concerns over how to handle critical transactions like customer refunds and vendor payments. Responding to these concerns, MeitY has now clarified that such legitimate transactions must continue, even in light of the new law prohibiting real-money gaming (RMG) activities.

The government has also instructed gaming companies to ensure smooth transitions for users whose activities were impacted by the ban, ensuring that users can easily withdraw funds that were previously locked in gaming platforms.

MeitY's Guidance on Smooth Transition for Users

In a meeting with gaming company representatives, MeitY officials, including Union Minister Ashwini Vaishnaw, emphasised the importance of protecting user interests. The ministry highlighted the need for companies to make it easier for users to withdraw their funds, which had been placed in real-money gaming accounts, following the implementation of the ban. This directive aims to ease any potential financial inconvenience faced by users during the transition period.

Read More: Online Gaming Act 2025 Explained!

Government's Stand on the Real-Money Gaming Ban

The real-money gaming ban, passed in August 2025, aims to curb the rising addiction to online gambling, particularly among youth and children. The law also seeks to prevent financial fraud related to online gaming platforms. Under the Act, individuals or entities involved in facilitating or authorising funds for real-money games may face penalties, including jail terms of up to 3 years and fines of ₹1 crore, with repeat offenders facing more severe punishment.

Promoting E-sports and Social Gaming

Despite the ban on real-money gaming, the government continues to support e-sports and social gaming. Minister Vaishnaw has expressed a commitment to promoting these forms of gaming, which are not subject to the same regulations as real-money games, encouraging responsible gaming practices and creating a balanced environment for both recreational and competitive gaming in India.

Conclusion

MeitY's recent directive to banks and fintech companies aims to ensure that gaming companies can still process necessary financial transactions despite the ban on real-money gaming. This move is designed to protect both consumers and businesses during the transition to a new regulatory environment. The government's continued support for e-sports and social gaming signals a shift towards fostering a healthier gaming culture in India.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.