RBI unveils game plan for a ‘less-cash’ economy
The RBI will also examine the technical, operational and business feasibility of using Aadhaar as a factor of authentication for payment transactions.
The Reserve Bank of India (RBI) on Thursday unveiled ‘Payment and Settlement Systems in India: Vision-2018’ aimed at building best of class payment and settlement systems for a ‘less-cash’ India.
The broad contours of Vision-2018 revolve around 5Cs — coverage, convenience, confidence, convergence and cost. “To achieve these, Vision-2018 will focus on four strategic initiatives such as responsive regulation, robust infrastructure, effective supervision and customer centricity,” the RBI said in the report.
“The regulatory framework, based on consultative approach, aims at achieving enhanced coverage of the payment systems coupled with convenience for end-users. A key objective would be to ensure a robust payments infrastructure in the country to increase accessibility, availability, interoperability and security,” the RBI said. The oversight and supervisory framework would focus on strengthening the resilience of both large value and retail payment systems in the country.
With increasing use of technology-based innovative payment products, the strategic initiatives under Vision-2018 are expected to reduce paper-based instruments significantly and lead to accelerated growth in mobile banking and other modes of electronic payments, the RBI said.
The RBI said a comprehensive review of the prepaid payment instruments (PPI) guidelines will be undertaken keeping in view the changing scenario. To promote mobile phones as access channel to payment and banking services, the guidelines will be reviewed to address issues related to customer registration for mobile banking, safety and security of transactions, risk mitigation and customer grievance redressal measures, it said.
White Label ATM guidelines, formed with the objective of ensuring expansion of ATM infrastructure in rural and semi-urban areas, have not resulted in the much-needed growth in ATM infrastructure in the desired geographical segments of the country due to multiple factors. “The WLA Guidelines will accordingly be examined holistically and targets realigned to meet present conditions,” it said.
According to the RBI, the increasing growth of electronic payments, especially online payments, riding the growth of e-commerce and m-commerce transactions, has brought to the fore the increasing role and importance of entities that facilitate such online payments such as payment gateway providers and payment aggregators.
“The current guidelines on maintenance of nodal accounts for such intermediaries (monitored through banks) are indirect and address only a few specific aspects of their functioning. Given their increasing role, the guidelines will be revised for the payments related activities of these entities,” it said.
Currently, the ATMs in the country read and process the card transactions only on the basis of data contained in the magnetic stripe, even though the card may be a Chip and PIN card. “With the roadmap in place for issuance of EMV Chip and PIN cards, the aim will be to ensure that all the ATMs in the country migrate to processing of EMV Chip and PIN cards on the basis of Chip data rather than magnetic stripe data,” it said.
Although ATM infrastructure is widely used for meeting cash requirements of the customers, it is increasingly being used as a channel for carrying out other non-financial transactions and delivering value-added services, it said. As such, the operational and logical access security aspects of ATMs assume significance, and any shortcomings in these areas make the systems vulnerable to attacks by fraudsters, thus impairing customer confidence and trust. “The bank will, therefore, examine holistically the physical and logical safety and security requirements of ATMs infrastructure and issue necessary guidelines to strengthen them,” it said.
The RBI will also examine the technical, operational and business feasibility of using Aadhaar as a factor of authentication for payment transactions.