Decoding RBI s new digital payments moves and their impact on fintech ecosystem
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The central bank governor Shaktikanta Das in his Monetary Policy Committee (MPC) address said that fintech companies such as prepaid instrument issuers (PPIs), card networks and TReDS operators, among others, will now be allowed to become members of its centralised payment systems such as RTGS and NEFT.
RBI Policy: Impact of a zero rate cut, interoperability between prepaid payments instruments
The Reserve Bank of India (RBI) on Wednesday announced a slew of measures for digital payments such as allowing
fintech companies to process RTGS and NEFT transactions, and also set new norms on interoperability and cash withdrawal facilities for digital payment wallets.
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NEFT, RTGS money transfer services extended beyond banks.
The Reserve Bank of India (RBI) on Wednesday (April 7) extended National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) facilities beyond banks. RBI Governor Shaktikanta Das announced that the services can now be used by non-bank payment operators as well. So far, only banks were allowed to use these (RTGS and NEFT) payments facilities.Â
Now, the issuers of Prepaid Payment Instrument (PPI), card networks, White label ATM operators and Trade Receivables Discounting System (TReDS) platforms can use these two modes.
As mentioned, this change has been made in order to encourage participation of non-banks across payment systems.
You can soon send money using NEFT, RTGS via a non-bank entity
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The central bank has announced that it will allow non banks entities like prepaid instruments issuers, card networks and white level ATMs. This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments, as per the RBI governor’s statement.
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Soon financial entities other than banks can offer Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) facilities. The Reserve Bank of India (RBI), in its monetary policy review, said that in a bid to boost digital payments, non-banks like fintech and payment banks can soon offer the RTGS and NEFT facility. This facility up until now was exclusively offered by banks.
RBI increases maximum balance limit to Rs 2 lakh for payments banks
The earlier limit was Rs 1 lakh. This decision has been taken to enhance financial inclusion. The apex bank s announcement comes over a long-standing demand of the payments bank sector
BusinessToday.In | April 7, 2021 | Updated 12:15 IST
RBI revises payments banks maximum balance limit
Reserve Bank of India has increased the maximum balance limit at the end of the day for payments banks to Rs 2 lakh. The earlier limit was Rs 1 lakh. This decision has been taken to enhance financial inclusion. The apex bank s announcement comes over a long-standing demand of the payments bank sector.
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The move is aimed at expanding the reach of these services to more users and reducing settlement risks, RBI governor Shaktikanta Das said on Wednesday.
“It is now proposed to enable non-bank PSOs like PPI issuers, card networks, white label ATM operators and Trade Receivables Discounting System (TReDS) platforms regulated by RBI, to take direct membership in CPSs. This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments,” Das added.
This means that companies such as Paytm, Visa, Mastercard and PhonePe among others will soon be able to process RTGS and NEFT payments.