RBI announces a slew of measures to boost digital payments

MUMBAI: The Reserve Bank of India (RBI) on Thursday announced a slew of measures targeted to boost digital payments, enhance the scope of priority sector lending, and drive innovation in the broader financial ecosystem.

Without giving a detailed outlay, the central bank said that it will soon roll out several of these projects targeted primarily to overcome the impediments faced by a large part of the country in accessing financial services due to digital and technology disparity seen across districts.

For making digital payments more accessible, a pilot for offline-based payments, which wouldn’t require Internet connectivity, is being planned, RBI said. This will mainly address the issue of limited access to the Internet, especially in rural India.

“Lack of Internet connectivity or low speed of Internet, especially in remote areas, is a major impediment in adoption of digital payments,” RBI Governor Shaktikanta Das said in his monetary policy statement.

The system could be Near Field Communication- (NFC) based contactless payment service on mobile phones. It could also be a feature phone payment service where the user can transfer funds from their bank account, or a wallet linked to a debit card without a smartphone connection.

“Against this backdrop, providing an option of off-line payments through cards, wallets and mobile devices is expected to further the adoption of digital payments,” he added.

The details of the ‘pilot’ will be announced soon, he added, following which a more elaborate expansion plan will be chalked out by the apex regulator.

Separately, the central bank has also amended the priority sector guidelines to include a weighted credit flow-based framework for banks to address the regional disparity seen in availing credit.

RBI has also included the start-up sector within the scope of priority sector target for availing loans from banks. “With a view to align the guidelines with emerging national priorities and bring sharper focus on inclusive development, the guidelines have been reviewed after wide ranging consultations with all stakeholders,” Governor Das said.

Meanwhile, a new online dispute resolution channel for failed digital transactions is also in the works. The system attempts to “minimise” human intervention in grievance redressal mechanisms followed by payment system operators (PSO) that provide digital services.

The central bank is also setting up an innovation hub that will help build new capabilities, technologies and ideas in the financial ecosystem by providing an incubation service.

“The Innovation Hub will support, promote and hand-hold cross-thinking spanning regulatory remits and national boundaries,” Das said in his speech.

“Areas such as cyber security, data analytics, delivery platforms, payments services, etc., remain in the forefront when we think of innovation in the financial sector,” he added.

The RBI last year had announced a regulatory sandbox program for new experiments in the field of financial technology under its supervision.

While six programs were shortlisted by the central bank for the first set of pilots, they have now been delayed due to the ongoing pandemic, RBI said in its statement on developmental and regulatory policies.

RBI announces a slew of measures to boost digital payments RBI announces a slew of measures to boost digital payments Reviewed by TechCO on 8/07/2020 Rating: 5

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