The Reserve Bank of India (RBI) on Friday mentioned that it will situation suggestions on digital payment safety controls in view of the pre-eminent function getting played by digital payment systems in India. The announcement comes at a time when a massive bank has been served development restrictions on account of repeated payment program outages and the all round price of transaction failures in the UPI program has surged. The central bank also raised the ceiling for contactless card transactions and e-mandates for card and UPI-primarily based transactions to Rs 5,000 from Rs 2,000.
In a uncommon instance of a central bank governor referring to a regulated entity by name, Shaktikanta Das mentioned the choice to take supervisory action against HDFC Bank stemmed from repeated episodes of outages and the bank’s overwhelming presence in the digital payments segment. “We have some concerns about different deficiencies and, therefore, we felt that it is necessary that HDFC Bank strengthens its IT systems before expanding further,” Das mentioned, adding, “We cannot put thousands or lakhs of customers who are using digital banking into any kind of difficulty for hours together and especially when we are ourselves giving so much emphasis on digital banking. The public confidence in digital banking needs to be maintained.” He also mentioned that the RBI’s teams are studying the incidence of a information centre outage at State Bank of India (SBI) that took spot on Thursday.
The governor emphasised the common need to have for all banks and all economic entities to invest much more in IT systems and technologies if they wished to retain public self-confidence in the program. The RBI is continuously engaged with the management of different banks and non-bank lenders exactly where it sees deficiencies in systems and procedures. It tries to perform with them internally and nudge them to strengthen their systems. “In certain situations, certain actions become unavoidable and inevitable and as the custodian of the digital payment segment in the country, the central bank has to act and that is precisely what we have done,” Das mentioned.
Industry executives mentioned that in an atmosphere of improved adoption of digital processes, there are various threats that could hamper the procedure. Bharat Panchal, chief danger officer for India, Middle East & Africa, FIS, mentioned, “In the proposed draft by the central bank, one can expect measures like increasing payment speed and reducing the infrastructure complexity, real-time fraud detection and prevention, improving the precision of risk scoring and accuracy of transaction blocking, and continuously screening for known fraud patterns.”
Payment firms also welcomed the greater cap on contactless payments and e-mandates, adding that it would encourage smaller sized firms to accept digital payments. “Be it a monthly kirana bill, spa service or a course fee, the spectrum of products and service that can be paid through contactless payments will definitely expand with this new move,” mentioned Manish Patel, founder and CEO, Mswipe. The improve in limit would allow more rapidly checkouts and improved transaction volumes, thereby enabling merchants to minimize money handling charges, Pine Labs mentioned in a statement.
In addition to certain norms on digital payments, the central also plans to place in spot a extensive framework for grievance redressal at banks. The framework will involve enhanced disclosures on client complaints by the banks, a monetary disincentive in the type of recovery of price of redress of complaints from banks when maintainable complaints are comparatively higher, and undertaking intensive assessment of grievance redress mechanism and supervisory action against banks that fail to strengthen their redress mechanism in a time-bound manner. The framework would be place in spot through January 2021.