RTGS and NEFT money transfer facilities extended beyond banks

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RTGS and NEFT

The Reserve Bank of India would now allow RTGS and NEFT connectivity with non-bank payment system operators, paving way for UPI interoperability. Along with this, the RBI also increased the maximum balance per customer for payments banks to Rs 2 lakh per individual from Rs 1 lakh earlier. “This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments,” RBI Governor Shaktikanta Das said after the first bi-monthly Monetary Policy Committee meeting of this financial year.

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Centralised payment systems such as RTGS and NEFT, operated by the RBI, was so far restricted to only banks with a few exceptions. RBI today announced that it is proposing to enable non-bank payment systems like PPIs, card networks, White label ATM operators, among others to take direct membership in the central bank run RTGS and NEFT.

RBI had earlier in October 2018 issued guidelines for adoption of inter-operability on a voluntary basis for full KYC PPIs. “As migration toward inter-operability has not been significant, it is now proposed to make inter-operability mandatory for full KYC PPIs and for all payment acceptance infrastructure,” the RBI Governor said. To incentivize the same, RBI will increase the outstanding limit of such PPIs to Rs 2 lakh from the Rs 1 lakh limit earlier. The central bank said that it will issue a separate circular for the changes announced.

Further, in an attempt to incentivised people to carry less cash and consequently perform more digital transactions, RBI has also proposed to allow the facility of cash withdrawal, for full-KYC PPIs of non-bank PPI issuers.

GST CouncilFor representational purposesBy Express News Service