The Reserve Bank of India on Wednesday expanded Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) facilities to non-bank payment system firms. The move could potentially benefit users of fintech firms such as Paytm, PhonePe, and others.
Until now, the Centralised Payment Systems (CPSs) were limited to banks only. However, the Central bank today announced that it is proposing to enable non-bank payment systems like PPIs, card networks, wide-level ATM operators, among others to take direct membership in the Centralised Payment Systems.
"It is now proposed to enable non-bank payment system operators like Prepaid Payment Instrument(PPI) issuers, card networks, White label ATM operators and Trade Receivables Discounting System (TReDS) platforms regulated by the Reserve Bank, to take direct membership in Centralised Payment Systems(CPSs)," RBI Governor Shaktikanta Das said on Wednesday.
The RBI also increased the maximum end-of-day balance limit for payment banks to Rs 2 lakh. Earlier, the limit was Rs 1 lakh. "With a view to furthering financial inclusion and to expand the ability of payments banks to cater to the growing needs of their customers, the current limit on maximum end of day balance of Rs 1 lakh per individual customer is being increased to Rs 2 lakh with immediate effect," Das added.
According to Das, the moves are likely to minimise the settlement risk in the financial system and enhance the reach of digital financial services.
Furthermore, in the Monetary Policy Committee meeting, the RBI expectedly left the repo rate unchanged at 4 per cent in view of rising coronavirus cases and elevate food inflation. It also retained a growth projection of 10.5 per cent for the current financial year as was estimated in its February bi-monthly policy. The central bank also said it expects retail inflation at 5.2 per cent in the first half of FY22.