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RBI to form guidelines on e-commerce, says Deputy Governor HR Khan

RBI to form guidelines on e-commerce, says Deputy Governor HR Khan

"There are some issues which we are trying to look at. E-commerce is innovative and we cannot push away, so we will see...," Reserve Bank of India Deputy Governor HR Khan said.

The concerns come within days of Commerce Minister Nirmala Sitharaman saying that her department was watching the developments in the fledgling e-commerce space. (Photo: Reuters) The concerns come within days of Commerce Minister Nirmala Sitharaman saying that her department was watching the developments in the fledgling e-commerce space. (Photo: Reuters)

The Reserve Bank of India (RBI) has some concerns on e-commerce transactions and will be coming out with some guidelines on the same, Deputy Governor HR Khan said on Wednesday.

"There are some issues which we are trying to look at. E-commerce is innovative and we cannot push away, so we will see... We are looking at coming out with some guidelines on it," Khan told reporters on the sidelines of an event orgainsed by the National Payments Corporation of India (NPCI) in Mumbai.

The Deputy Governor, however, did not elaborate what the specific concerns of the regulator are.

In August, RBI had found that US-based taxi aggregator Uber was flouting payments norms and had asked it to comply by October 31, for which the company has sought more time.

Uber was following its practice that falls short on the two-step user authentication norms as laid out by the central bank.

The concerns voiced by the senior RBI official come within days of Commerce Minister Nirmala Sitharaman saying that her department was watching the developments in the fledgling e-commerce space including some cases involving e-commerce majors in the courts over the market model.

It also comes after traditional brick-and-mortar traders approached the fair trade regulator Competition Commission of India (CII) in this regard.

Khan said the apex bank will come out with final guidelines on trade receivables discounting system, a draft of which was issued in July 2014.

"We expect it is going to be a big game changer for the receivables of small and medium industry. We are going to put the guidelines and the application will be invited to middle of February," he added.

Under the guidelines, both factoring and reverse factoring will be allowed, he said. On the foreign investors' caps in government securities, the deputy governor said the increase would come about but in a phased manner.

When asked about the Budget announcement of bond buy-backs to extend the maturity and reduce repayment burdens, Khan did not give an exact timeline or quantum of the mop-up and limited to saying that it will be done by March 2015.

On the recently issued guidelines for establishment of the payments banks and small finance banks, he said the new banks will not be a threat to existing banks but may increase competition.