The Reserve Bank of India (RBI) has released Statement on Developmental and Regulatory Policies dated 06th August, 2020 on account of various developmental and regulatory policy measures to enhance liquidity support for financial markets and other stakeholders; further easing of financial stress caused by COVID-19 disruptions.
Payment and Settlement Systems
1. Scheme of Offline Retail Payments Using Cards and Mobile Devices
To resolve issues of Lack of internet connectivity or low speed of internet, especially in remote areas related to digital payments using mobile phones, cards, wallets, the Reserve Bank has been encouraging entities to develop offline payment solutions. It is proposed to allow a pilot scheme for small value payments in off-line mode with built-in features for safeguarding interest of users, liability protection, etc.Based on experience gained, detailed guidelines for roll-out of the scheme will be announced in due course.
2. Online Dispute Resolution (ODR) for Digital Payments
The Reserve Bank shall require Payment System Operators (PSOs) to introduce Online Dispute Resolution (ODR) Systems in a phased manner as the number of digital transactions rise significantly, there is a concomitant increase in the number of disputes and grievances and manual intervention is necessary to deal with them in a timely and effective manner. The authorized PSOs shall be required to implement ODR systems for failed transactions in their respective Payment Systems.
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3. Positive Pay Mechanism for Cheques
Cheque Truncation System (CTS) : It has been decided by RBI to introduce a mechanism of Positive Pay for all cheques of value Rs 50,000 and above. Under this mechanism, cheques will be processed for payment by the drawee bank based on information passed on by its customer at the time of issuance of cheque.
This measure will cover approximately 20 per cent and 80 per cent of total cheques issued in the country by volume and value, respectively. The purpose is to further augment customer safety in cheque payments and reduce instances of fraud occurring on account of tampering of cheque leaves.
4. Creation of Reserve Bank Innovation Hub
Six proposals were accepted under the Sandbox, the pilot studies / trials of which have been delayed on account of the present COVID-19 situation. 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.
To promote innovation across the financial sector by leveraging on technology and create an environment which would facilitate and foster innovation, Reserve Bank will set up an Innovation Hub in India.
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The Innovation Hub will act as a centre for ideation and incubation of new capabilities which can be leveraged to create innovative and viable financial products and / or services to help achieve the wider objectives of deepening financial inclusion, efficient banking services, business continuity in times of emergency, strengthening consumer protection, etc. The Innovation Hub will support, promote and hand-hold cross-thinking spanning regulatory remits and national boundaries.
The author of the above article is CS Lalit Rajput, Partner at Xcede Consultech LLP.
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