RBI Proposes New Measures to Boost Financial Innovation and Inclusivity
The Reserve Bank of India has unveiled proposals aimed at enhancing innovation, inclusivity, and efficiency in the financial ecosystem, focusing on creating a more accessible and equitable financial environment.
Establishing the Digital Payments Intelligence Platform
The RBI’s decision to establish a Digital Payments Intelligence Platform is a significant stride in mitigating payment fraud risks. This platform will leverage advanced technologies to address the growing concerns over digital payment frauds, which surged by 70.64% to Rs 2,604 crore during the six-month period ending March 2024. The alarming rise in fraud cases corresponds with India’s rapid adoption of digital payment systems, particularly the Unified Payments Interface (UPI), which has seen a 137% growth in transactions over the past two years, amounting to ₹200-lakh crore.
Formation of the AP Hota Committee
To propel the Digital Payments Intelligence Platform initiative, the RBI has constituted a committee chaired by AP Hota, the former MD & CEO of the National Payments Corporation of India (NPCI). This committee is tasked with examining the various facets of setting up the platform, with recommendations expected within two months. This move underscores the RBI’s commitment to fortifying India’s digital payment infrastructure against fraud.
Revised Bulk Deposit Limits
In another significant proposal, the RBI has suggested revising the definition of bulk deposits for different banking entities. For commercial banks, excluding Regional Rural Banks (RRBs), and small finance banks, the bulk deposit threshold will be increased from Rs 2 crore to Rs 3 crore. For local area banks, the threshold will be set at Rs 1 crore, aligning with the standards for RRBs. This revision is intended to provide banks with greater flexibility in managing their assets and liabilities, allowing for differential interest rates based on their specific requirements.
Simplifying Recurring Transactions
The RBI has also proposed simplifications in the e-mandate framework for recurring transactions. Currently, a pre-debit notification is required at least 24 hours before the actual debit from the customer’s account. The new proposal exempts this requirement for automatic replenishments of balances in Fastag and the National Common Mobility Card (NCMC). Additionally, the UPI Lite wallet will benefit from an auto-replenishment feature, eliminating the need for extra authentication when the balance falls below a preset threshold.
Rationalizing Export and Import Guidelines
To align with the evolving dynamics of global trade, the RBI aims to rationalize the guidelines governing the export and import of goods and services. This initiative is designed to simplify operational procedures, thereby promoting ease of doing business for all stakeholders involved in cross-border trade. Draft regulations and directions are expected to be made available for public feedback by the end of June 2024.
HaRBInger 2024: Fostering Innovation Through Hackathons
The RBI’s third global hackathon, HaRBInger 2024, is poised to drive innovation in the financial sector. Focused on themes such as responsible innovation, inclusivity, and fraud prevention, this event encourages participants to develop cutting-edge solutions for real-time fraud detection, financial inclusion for the visually impaired, and more. The hackathon’s emphasis on inclusivity is particularly noteworthy, with initiatives like ‘talking ATMs with Braille keypads’ aiming to make digital finance accessible to all.
Launch of PRAVAAH Portal and Retail Direct App
In a move to further enhance transparency and efficiency, the RBI has launched the PRAVAAH portal and the Retail Direct Mobile App. The PRAVAAH portal is designed to streamline the application process for regulatory approvals, while the Retail Direct Mobile App facilitates retail investors’ access to government securities transactions. These initiatives are expected to democratize access to financial services and improve the overall user experience.
FinTech Repository: A Resource for Innovation
The FinTech Repository, another initiative by the RBI, aims to provide comprehensive regulatory information about the Indian FinTech sector. Managed by the RBI Innovation Hub, this repository will support policymakers and industry participants by offering insights into sectoral trends, data analytics, and regulatory developments. The repository is anticipated to be a valuable resource for fostering a secure and innovative financial ecosystem in India.
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- vajiramias.com
- fintech.rbi.org.in
- www.rbi.org.in
- www.rbi.org.in
- www.hindustantimes.com
- bfsi.economictimes.indiatimes.com