RBI decides to open up RTGS, NEFT for payment system operators

Mumbai, April 7 (IANS): In a major move in the online payments segments, the Reserve Bank of India (RBI) has decided to allow payment system operators to take direct membership of Centralised Payment Systems (CPS), such as RTGS and NEFT.

Membership in Centralised Payment Systems (CPS) — RTGS and NEFT — for entities other than banks are so far limited to banks, with a few exceptions, such as specialised entities like clearing corporations and select development financial institutions.

In its statement on developmental and regulatory policies, the RBI noted that over the last few years, the role of non-bank entities in payment space such prepaid payment instrument (PPI) issuers, card networks, white label ATM (WLA) operators, Trade Receivables Discounting System (TReDS) platforms, has grown in importance and volume, as they have innovated by leveraging technology and offering customised solutions to users.

“To reinforce this trend and encourage participation of non-banks across payment systems, it is proposed to enable, in a phased manner, payment system operators, regulated by the Reserve Bank, to take direct membership in CPSs,” it said.

This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments.

These entities will, however, not be eligible for any liquidity facility from the Reserve Bank to facilitate settlement of their transactions in these CPSs.

Payments Banks allowed to hold INR 2 lakh balance per customer

In a major boost to operations of the Payments Banks, the Reserve Bank of India on Wednesday doubled the limit of maximum balance that an individual customer can hold with them.

Accordingly, Payments Banks can now hold a maximum balance of INR 2 lakh per individual customers at the end of the day.

The Guidelines for Licensing of Payments Banks issued on November 27, 2014 allowed such banks to hold a maximum balance of INR 1 lakh per individual customer earlier.

RBI in its statement on developmental and regulatory policies said that the changes have been made based on a review of performance of payments banks and with a view to encourage their efforts for financial inclusion and to expand their ability to cater to the needs of their customers, including MSMEs, small traders and merchants.

A circular proposing the changes will be issued by RBI separately.