Reserve Bank of India Statement on Developmental and Regulatory Policies
Date: Oct 09, 2024
This Statement sets out various developmental and regulatory policy measures relating to
(i) Regulations; and
(ii) Payment Systems.
I. Regulations
1. Responsible Lending Conduct โ Levy of Foreclosure Charges/ Pre-payment Penalties on Loans
In terms of extant guidelines, banks and NBFCs are not permitted to levy foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned to individual borrowers with or without co-obligant(s), for purposes other than business. With a view to safeguard customersโ interest through better transparency and customer centricity by lenders, it has been decided to broaden the scope of such regulations to cover loans to Micro and Small Enterprises (MSEs) extended by the Regulated Entities of the Reserve Bank. A draft circular in this regard shall be issued for public consultation.
2. Discussion Paper on Capital Raising Avenues for Primary (Urban) Co-operative Banks
The initial set of guidelines on issue and regulation of share capital and securities for Primary (Urban) Co-operative Banks (UCBs) to ensure alignment with the Banking Regulation (Amendment) Act, 2020 were issued in 2022. However, these guidelines did not cover the newly enabled capital related provisions such as issuance of special shares, issuance of shares at a premium, etc., which are new to co-operative banking sector. The Report of the Expert Committee on Primary (Urban) Co-operative Banks chaired by Shri. N.S. Vishwanathan, former Deputy Governor, RBI, had provided broad guiding principles through its recommendations on these provisions.
A Working Group was constituted in RBI to further operationalise the broad-based recommendations of the Expert Committee on the newly enabled capital related provisions. Based on the recommendations of the Working Group, a Discussion Paper on Capital Raising Avenues for Primary (Urban) Co-operative Banks will be issued for eliciting feedback and suggestions from stakeholders.
3. Creation of Reserve Bank Climate Risk Information System (RB-CRIS)
Climate change is emerging as one of the significant risks to the financial system. It is crucial for regulated entities to undertake climate risk assessments for ensuring stability of their balance sheets and that of the financial system. Such an assessment requires, among other things, high quality data relating to local climate scenarios, climate forecasts, and emissions. The available climate related data is characterised by various gaps such as fragmented and varied sources, differing formats, frequencies and units. To bridge these gaps, the Reserve Bank proposes to create a data repository namely, the Reserve Bank โ Climate Risk Information System (RB-CRIS) comprising of two parts. The first part will be a web-based directory, listing various data sources, (meteorological, geospatial, etc.) which will be publicly accessible in the RBI website. The second part will be a data portal comprising of datasets (processed data in standardised formats). The access to this data portal will be made available only to the regulated entities in a phased manner.
II. Payment Systems
4. UPI – Enhancement of limits:
In order to encourage wider adoption of UPI, it has been decided to enhance the limits for the following products of UPI:
i) UPI123Pay: UPI123 was launched in March 2022, with a view to enable feature-phone users to use UPI. This facility is now available in 12 languages. Currently, the per-transaction limit in UPI123Pay is capped at โน5000. In order to widen the use-cases, in consultation with the stakeholders, it has been decided to enhance the per-transaction limit to โน10,000. Necessary instructions will be issued to NPCI shortly.
ii)ย UPI Lite:ย A limit of โน500 per transaction and an overall limit of โน2000 per UPI Lite wallet, is presently applicable, with the facility of auto-replenishment. To widen the scope of usage of this product, it has now been decided to increase the UPI Lite wallet limit to โน5,000 and per-transaction limit to โน1,000. Theย Framework for facilitating small value payments (Read below) in offline digital mode, issued by the Reserve Bank, under which UPI Lite has been enabled, will be suitably amended.
5. Introduction of beneficiary account name look-up facility
Payment Systems like UPI and IMPS provide a facility to the remitter to verify the name of the receiver (beneficiary) before initiating a payment transaction. There have been requests to introduce such a facility for Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) systems.
Accordingly, to enable remitters in RTGS and NEFT to verify the name of the beneficiary account holder before initiating funds transfer, it is now proposed to introduce a โbeneficiary account name look-up facilityโ. Remitters can input the account number and the branch IFSC code of the beneficiary, following which the name of the beneficiary will be displayed. This facility will increase customer confidence as it would reduce the possibility of wrong credits and frauds. Detailed guidelines will be issued separately.
(Puneet Pancholy)
Chief General Manager
Framework for Facilitating Small-Value Digital Payments in Offline Mode
(Updated as on August 24, 2023)
RBI/2021-22/146
CO.DPSS.POLC.No.S1264/02-14-003/2021-2022
January 03, 2022
(Updated as on August 24, 2023)
The Chairman / Managing Director / Chief Executive Officer
Authorised Payment System Operators and Participants (Banks and Non-banks)
Madam / Dear Sir,
Framework for Facilitating Small Value Digital Payments in Offline Mode
Reserve Bank had, vide circular dated August 06, 2020, permitted a pilot scheme to encourage technological innovations that enable small value digital transactions in offline mode. It was stated therein that the decision on formalising such a system would be based on the experience gained.
- Pilot testing was undertaken by some entities during the period from September 2020 to July 2021. With encouraging feedback from the pilots, it was announced in the Statement on Developmental and Regulatory policies dated October 08, 2021, that a framework for carrying out small value digital payments in offline mode across the country would be introduced.
- Accordingly, the framework to enable small value digital payments in offline mode using cards, wallets, mobile devices, etc., is detailed in Annex. Authorised Payment System Operators (PSOs) and Payment System Participants (PSPs) โ Acquirers and Issuers (banks and non-banks) – shall ensure compliance with all the applicable instructions.
- This directive is issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall come into effect immediately.
Yours faithfully,
(P Vasudevan)
Chief General Manager
Annex
CO.DPSS.POLC.No.S1264/02-14-003/2021-2022 dated January 03, 2022
An offline payment means a transaction which does not require internet or telecom connectivity to take effect. Authorised Payment System Operators (PSOs) and Payment System Participants (PSPs) โ Acquirers and Issuers (banks and non-banks) โ desirous to provide / enable payment solutions that facilitate small value digital payments in offline mode shall comply with the following requirements:
Offline payments may be made using any channel or instrument like cards, wallets, mobile devices, etc.
Offline payments shall be made in proximity (face to face) mode only.
Offline payment transactions may be offered without Additional Factor of Authentication (AFA).
Payment instruments shall be enabled for offline transactions based on explicit consent of the customer. Such transactions using cards shall be allowed without a requirement to switch on the contactless transaction channel, in relaxation of terms of DPSS circular no. DPSS.CO.PD no.1343/02.14.003/2019-20 dated January 15, 2020 on Enhancing Security of Card Transactions.
The upper limit of an offline payment transaction shall be โน500. The total limit for offline transactions on a payment instrument shall be โน2,000 at any point in time. Replenishment of used limit shall be allowed only in online mode with AFA.
The issuer shall send transaction alerts to users as soon as transaction details are received. There is no compulsion to send alert for each transaction; however, details of each transaction shall be adequately conveyed.
The acquirer shall incur all liabilities arising out of technical or transaction security issues at merchantโs end.
Offline payments shall be covered under the provisions of RBIโs limited customer liability circulars (as amended from time to time) – DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 06, 2017; DCBR.BPD.(PCB/RCB).Cir.No.06/12.05.001/2017-18 dated December 14, 2017 and para 17 of Master Direction on Prepaid Payment Instruments dated August 27, 2021.
The customers shall have recourse to the Reserve Bank โ Integrated Ombudsman Scheme, as applicable, for grievance redressal.
Reserve Bank retains the right to stop or modify the operations of any such payment solution that enables small value digital payments in offline mode.
Read More
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- RBI took Additional Steps against Paytm Payments Bank (23/02/2024)
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- โน2000 Denomination Banknotes โ Withdrawal from Circulation (RBI-19/05/2023)
- RBI regulatory policy relating to Financial Markets; Regulation; Payment and Settlement Systems and Currency Management (08/02/2023)
- Summary of RBI Concept Note on Central Bank Digital Currency (07/10/2022)
