Availability of 24×7NEFT service to the public from Dec’19

The Statement on Developmental and Regulatory Policies released by RBI yesterday set out various developmental and regulatory policy measures in the areas of Financial Markets; Payment and Settlement Systems; Banking Regulation, Financial Inclusion and Credit flow to NBFCs.

Highlight of policies statement are as follows;

Payment and Settlement Systems:

As cited in the Payment System Vision 2021 document, RBI will make availability of NEFT system on a 24×7 basis from December 2019. This would help bank customers transfer funds at any time during the week and week end. The round the clock availability of funds transfer service is expected to transform the retail payments system of the country.

Expansion of Biller Categories for Bharat Bill Payment System:

The Bharat Bill Payment System (BBPS), an interoperable platform for repetitive bill payments is currently covers only five segments viz., direct-to-home (DTH);  electricity; gas;  telecom; and  water bills. As a part of its push for digitalization RBI decided to permit all categories of billers (except prepaid recharges) to participate in BBPS recurring bill payments on a voluntary basis. This would allow all recurrent billers to plug into BBPS and enable their customers to make anytime anywhere payment services. Further, these segments would also benefit from the standardised bill payment experience for customers. Detailed instructions in this regard will be issued by RBI by the end of September 2019.

 ‘On-tap’ Authorisation for Retail Payment Systems:

In order to benefit from diversification of risk as also to encourage innovation and competition, the Central banker has decided to offer ‘on tap’ authorisation to entities desirous to function or operate or provide platforms for bill payment operating unit (BBPOU), trade receivables discounting system (TReDS) and whiteATMs (WLAs).RBI communiqué says, the instructions to this effect will be issued by the end of September 2019.

Creation of a Central Payments Fraud Information Registry:

The Payment System Vision 2021 envisages a framework for collecting data on frauds in the payment systems. In order to carry forward these efforts, RBI proposes to facilitate the creation of a Central Payment Fraud Registry for tracking payment system frauds. According to the statement, the payment system participants will be provided access to this registry for near-real-time fraud monitoring. The aggregated fraud data will also be published to educate customers on emerging risks. A detailed framework in this regard will be put in place by the end of October 2019.

Creation of a Central Payments Fraud Information Registry:

There is a mechanism in place for banks to report all banking frauds to the Central Fraud Monitoring Cell of the Reserve Bank. The Reserve Bank of India for enhancing the confidence of customers in the payment systems is creating a Central Payment Fraud Registry for tracking payment system frauds. A detailed framework in this regard will be put in place by the end of October 2019.

Credit flow to NBFC:

On a review of standardised approach for Credit Risk Management, consumer credit, including personal loans and credit card receivables, the banking regulator has decided to reduce the risk weight for consumer credit, including personal loans, but excluding credit card receivables, the risk weight of 125% reduced to 100%. As per the statement guidelines in this regard would be issued by the end of August 2019.