RBI sets rules for digital payments in India
PrintListen to this Article
The new rules come at a time when India’s burgeoning payments ecosystem has seen increased instances of outages, frauds and cyber breaches. The new rules set the framework for all regulated entities to standardise their security operations to emulate best practices defined by Mint Road.
These rules are directly applicable for scheduled commercial banks, small finance banks, payment banks and credit card-issuing NBFCs. The new set of norms also specifies the criteria under which regulated entities can form partnerships and interact with third-party apps and ecosystem players such as mobile applications, payment operators and gateways.
“The Master Direction provides necessary guidelines…to set up a robust governance structure and implement common minimum standards of security controls for digital payment products and services,” the central bank said in a circular. “The guidelines are technology and platform agnostic and shall create an enhanced and enabling environment for customers to use digital payment products in a more safe and secure manner."
All regulated entities have been given six months to ensure compliance.
The 21-page master circular issues specifications on a diverse set of application areas, including mandates from source code protection of third-party UPI apps, cyber security guidelines for safety against external attacks, card payments and internet banking security protocols.
“Going by the pre-eminent role being played by the digital payment systems in India, RBI gives the highest importance to the security controls around it,” RBI said. “While the guidelines will be technology and platform agnostic, it will create an enhanced and enabling environment for customers to use digital payment products in a more safe and secure manner. Necessary guidelines will be issued separately."
RBI Governor Shaktikanta Das had first hinted at the introduction of these guidelines in his Monetary Policy Committee address on December 4, 2020. Das had said such a detailed specification for the payment ecosystem would seek to bring a “common minimum standard".
These rules will have implications for not only regulated banks, but also third-party payment applications such as Google Pay, WhatsApp Pay and PhonePe on how the nteract with their banking partners and store customer data.
It will also affect the business models of several payment gateways that rely on delayed settlement of merchant funds to banking partners. The rules now specify that a payment operator or a bank cannot delay settlements to nodal settlement accounts beyond 24 hours.
“The Board and Senior Management shall be responsible for implementation of this policy. The policy shall be reviewed periodically, at least on a yearly basis. REs may formulate this policy separately for its different digital products or include the same as part of their overall product policy,” the central bank said.
Category : RBI | Comments : 0 | Hits : 597
Listing of an Indian company on international stock exchanges got a push with the Reserve Bank of India (RBI) coming out with regulations under Foreign Exchange Management (FEMA). Experts believe new regulations will help companies utilise foreign exchange more effectively. Regulations have been made public through two notifications. First set of regulations deals with mode of payment and reporting of non-debt instruments. “The proceeds of purchase / subscription of equity shares of an ...
The Lok Sabha elections 2024 are in full swing with electioneering adding much colour to the entire process. However, to ensure that there is no wrongdoing, the Reserve Bank of India (RBI) has sent a missive to Payment System Operators (PSOs) asking them to keep a watch on all suspicious high-value transactions that they may come across in their systems. The general purpose of the letter is to deny the use of electronic fund transfer mechanism to anyone who is intending to influence the election...
he Reserve Bank on Tuesday came out with draft guidelines to further strengthen regulations on payment aggregators, a move aimed at boosting the payment ecosystem. The draft also covers the physical point-of-sale activities of payment aggregators (PAs). The RBI said that given the growth in digital transactions and the significant role that PAs play in this space, the current directions on PAs are proposed to be updated and cover, inter alia, KYC and due diligence of merchants, operations ...
The RBI on Monday eased rules to allow resident entities to hedge their exposures to the price risk of gold using the OTC derivatives in the International Financial Services Centre (IFSC) in addition to the derivatives on the exchanges in the IFSC. Resident entities such as banks were permitted to hedge their exposure to the price risk of gold on the exchanges in the IFSC that are recognised by the International Financial Services Centres Authority (IFSCA), and the new directive provides them...
The Reserve Bank of India (RBI) on March 21 said it has imposed monetary penalty on five co-operative banks for rule violations. These banks are Pragati Mahila Nagrik Sahakari Bank, Janata Co-operative Bank, Jila Sahakari Kendriya Bank, Karad Urban Co-operative Bank, and The Kalupur Commercial Co-operative Bank. The central bank imposed Rs 26.60 lakh on The Kalupur Commercial Co-operative Bank, Rs 13.30 lakh on Karad Urban Co-operative Bank, Rs 5 lakh on Janata Co-operative Bank, Rs 1 lakh...
Comments