Tag: RBI

Bank Holidays October 2021: Banks to remain shut for up to 14 days from Oct 12; check full list here

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On 12 October 2021, banks in Agartala and Kolkata will remain shut due to Durga Puja (Maha Saptami). Image: Reuters

Bank Holidays in October: As the festive season has started, banks in India will remain closed for up to 14 days, starting from today in October 2021, including second and fourth Saturdays, and Sundays. Apart from the weekly offs, banks will not be closed for all 14 days for all states as these are state-specific holidays for different occasions. The Reserve Bank of India (RBI) has categorised holidays under three categories — Holiday under Negotiable Instruments Act; Holiday under Negotiable Instruments Act and Real-Time Gross Settlement Holiday; and Banks’ Closing of Accounts. The list of holidays given below has been notified by RBI.

Festive Holidays in October 2021

12 October 2021 – Durga Puja (Maha Saptami)
13 October 2021 – Durga Puja (Maha Ashtami)
14 October 2021 – Durga Puja/Dussehra (Maha Navami)/Ayutha Pooja
15 October 2021 – Durga Puja/Dasara/Dusshera (Vijaya Dashmi)
16 October 2021 – Durga Puja (Dasain)
18 October 2021 – Kati Bihu
19 October 2021 – Id-E-Milad/Eid-e-Miladunnabi/Milad-i-Sherif (Prophet Mohammad’s Birthday)/Baravafat
20 October 2021 – Maharishi Valmiki’s Birthday/Lakshmi Puja/Id-E-Milad
22 October 2021 – Friday following Eid-i-Milad-ul-Nabi
26 October 2021 – Accession Day

On 12 October 2021, banks in Agartala and Kolkata will remain shut due to Durga Puja (Maha Saptami). On the next day, banks in Agartala, Bhubaneswar, Gangtok, Guwahati, Imphal, Kolkata, Patna, and Ranchi will observe a holiday on account of Durga Puja (Maha Ashtami). On 14 October, banks across Agartala, Bengaluru, Chennai, Gangtok, Guwahati, Kanpur, Kochi, Kolkata, Lucknow, Patna, Ranchi, Shillong, and Thiruvananthapuram will be closed for Durga Puja/Dussehra (Maha Navami)/Ayutha Pooja.

On 15 October 2021, except for Imphal and Shimal, banks across the country will remain closed for Durga Puja/Dasara/Dusshera (Vijaya Dashmi). Only banks in Gangtok will remain closed on 16 October to observe Durga Puja (Dasain). On 18 October, banks in Guwahati will be closed; on 19 October, banks in Ahmedabad, Belapur, Bhopal, Chennai, Dehradun, Hyderabad, Imphal, Jammu, Kanpur, Kochi, Lucknow, Mumbai, Nagpur, New Delhi, Raipur, Ranchi, Srinagar, Thiruvananthapuram will remain shut for Id-E-Milad/Eid-e-Miladunnabi/Milad-i-Sherif. Banks in Agartala, Bengaluru, Chandigarh, Kolkata, Shimla, will be closed on 20 October for Maharishi Valmiki’s Birthday. On 22 and 26 October, banks in Jammu and Srinagar will remain closed for Eid-i-Milad-ul-Nabi, and Accession Day, respectively.

Weekend Bank Holidays in October 2021

17 October 2021 – Sunday
23 October 2021 – 4th Saturday
24 October 2021 – Sunday
31 October 2021 – Sunday

All the public and private sector banks in India remain closed on the second and fourth Saturdays of every month, along with a weekly holiday on Sunday. Even as banks will remain shut on the above-mentioned days, customers can avail net banking and other online services. Mobile and internet banking will also remain operational.

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RBI issues revised operational guidelines on on-tap SLTRO scheme for SFBs, BFSI News, ET BFSI

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The Reserve Bank of India (RBI) on Monday issued revised operational guidelines on the special long-term repo operations (SLTRO) scheme for small finance banks (SFBs). In the monetary policy announced last week, the RBI had extended the on-tap SLTRO for SFBs till December 31, 2021. This facility was earlier made available till October 31, 2021.

The RBI in a statement on Monday said all SFBs eligible under the liquidity adjustment facility (LAF) can participate in the scheme.

“There is no tenure restriction regarding lending by SFBs under the scheme. However, the SFBs will have to ensure that the amount borrowed from the RBI should at all times be backed by lending to the specified segments till maturity of the SLTRO,” the statement said.

Furthermore, SFBs should endeavour to lend within a reasonable period, i.e., not later than 30 days from the date of availing the funds from the RBI.

“The scheme will now be operationalised on tap,” RBI said.

Accordingly, the last tranche of the SLTRO auction due on October 14, 2021, announced on May 7, 2021, will not be conducted, it said.

SFBs can place requests for funds through e-mail and the RBI will aggregate all such requests received and release funds every Monday (on the subsequent working day if Monday is a holiday) by initiating a three-year repo contract at repo rate with the requesting bank, the statement said.

Requests from the SFBs desirous of availing funds from the RBI will be subject to the availability of funds as on the date of application. The funds cannot be guaranteed in case the total amount of Rs 10,000 crore is already availed, the statement said.

In case the requested amount exceeds the remaining amount under the scheme on the date of operation, the remaining amount will be distributed on a pro-rata basis among all the eligible requests.

The RBI reserves the right to decide the quantum of allotment and/ or accept/ reject any or all the requests, either wholly/ partially, without assigning any reason thereof.

The eligible collateral and margin requirements will remain the same as applicable for LAF operations.

The amount utilised under the scheme will be informed to market participants in the money market operations (MMO), RBI said. PTI HV HRS hrs



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RBI imposes Rs 30 lakh penalty on Janata Sahakari Bank, Pune, BFSI News, ET BFSI

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The RBI on Monday said a penalty of Rs 30 lakh has been imposed on Janata Sahakari Bank Ltd, Pune for non-compliance with certain directions. The penalty, the RBI said, has been imposed for non-compliance with specific directions issued by RBI under the Supervisory Action Framework (SAF) and RBI directions on ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’.

The statutory inspection of the bank with reference to its financial position as on March 31, 2019, the Inspection Report pertaining thereto, and examination of all related correspondence revealed that the bank had not complied with the directions on exposure to sensitive sectors (real estate) and classification and reporting of frauds, the RBI said.

The RBI, however, added the penalty is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers

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Indian investors in the dark as cryptocurrency ads gather steam, BFSI News, ET BFSI

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New Delhi, “Kya aapke portfolio mein crypto hai?” If you have read such advertising lines recently — and now watching crypto ads as you surf through IPL 2021, YouTube and various social media platforms — make sure you hold on to your hard-earned money for a while.

Indian crypto players are bombarding people with advertisements across platforms — doubling down on their marketing spend when the cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.

The ball is currently in the court of the Finance Ministry and the Reserve Bank of India (RBI). A cryptocurrency bill is expected in the winter session and till the whole picture is cleared, investing in cryptocurrencies can be a dangerous move, warn legal experts.

“Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks,” is a thin line at the end of the advertisements, not visible to many people who have started investing via various crypto exchanges.

According to Dr. Pavan Duggal, a seasoned Supreme Court advocate and a cyber law expert, few players are asking Indian investors to invest in cryptocurrencies, primarily because there is a big legal vacuum that exists in the country.

“India has still not made up its mind as to how it wants to deal with cryptocurrencies. These are not legal tender in India. As per the judgment of the Supreme Court of India, the Reserve Bank of India is the nodal statutory authority to deal with all aspects pertaining to cryptocurrencies. However, more work needs to be done in this area,” Duggal told IANS.

If we look at cryptocurrencies as mere electronic records, they could be brought under the ambit of legality under Section 4 of the Information Technology Act, 2000. However, there is a lack of appropriate capacity building and awareness among the Indian investors about legal capabilities and nuances of cryptocurrencies.

“The government cannot be a mute spectator while open calls are being made asking Indian investors to invest into cryptocurrencies. Without appropriate homework on the legalities of cryptocurrencies in India, merely prohibiting players from asking Indian investors to invest crypto currencies would also not work,” Duggal elaborated.

India has seen a spurt in the popularity of crypto exchanges and platforms in recent months like CoinSwitch Kuber (CSK), WazirX, CoinDCX, ZebPay, Unocoin and BuyUcoin etc.

Within 15 months of commencing operations in India, CoinSwitch Kuber is India’s largest crypto exchange with more than 10 million users. Of the total 10 million users, 7 million are active users on the platform with a monthly transaction volume of Rs 15,138 crore.

Homegrown crypto exchange Unocoin has launched deposits via UPI wallets in the Indian currency for a faster top-up to buy and sell Bitcoins and other cryptocurrencies on the platform.

“There is still uncertainty among the prospective users regarding the usage of cryptocurrency in comparison to real money. We want all our users to have the ease of trading or exchanging on our platform,” said Sathvik Vishwanath, CEO and Co-Founder, Unocoin.

According to a report by IT industry’s apex body Nasscom, there are 15 million retail investors in India investing in the cryptotech space.

New Delhi-based cyberlaw expert Virag Gupta said that several emerging sectors within the digital economy do not have an established legal framework and regulatory network.

“Cryptocurrency is a unique area, since it attracts concurrent regulation by the Ministries of Law, Finance and Commerce; alongside the RBI and the SEBI. Nonetheless, certain regulatory needs may be addressed using the IT Act and taxation may be enabled through a notification by the Ministry of Finance,” Gupta told IANS.

A legal endorsement by the RBI and legislation passed by the Parliament may further pave the way for lawful trading.

“It is a misconception to believe that a conducive regulatory environment will harm the crypto currency sector. Rather, to cement a certain future, detailed jurisprudence diving deep within the currency and technology essential to the sector must be designed,” Gupta suggested.

Otherwise, the entire sector may be susceptible to uncertain government intervention “such as measures employed by the Chinese government which have led to loss of trust, investments, and overall destruction of the market”.

China’s central bank announced last month that all transactions of cryptocurrencies are illegal, effectively banning digital tokens such as Bitcoin, Ethereum and Solana etc.

When Bitcoin crossed $50,000 again last week, Shivam Thakral, CEO, BuyUcoin, said there has been a paradigm shift in the investment patterns across the globe which is underlined by the data shared by crypto exchanges from time to time.

“India’s middle-class population is willing to explore digital assets for creating long-term wealth to fulfil their goals, which may not be possible through any other asset class,” Thakral said.

However, it is possible that the gullible Indian investors would invest in crypto currencies, only to find that their business interests have been prejudicially impacted.

“This is a golden opportunity for the Indian government to explore mechanisms of how it can ride the tide of crypto-currencies and also draft enabling legal frameworks to regulate crypto-currencies,” said Duggal.

To cement a certain future, “detailed jurisprudence diving deep within the currency and technology essential to the sector must be designed,” Gupta added.

(Nishant Arora can be reached at nishant.a@ians.in)

–IANS

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Borrowers hasten plans to raise bonds after RBI’s steps to cut easy money, BFSI News, ET BFSI

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Companies are rushing to raise bond funds after the Reserve Bank of India took steps to cut easy money in its bi-monthly policy last week, resulting in an uptick in rates.

Companies including Indian Railways Finance Corporation, State Bank of India, Punjab National Bank and IndusInd Bank are likely to raise about Rs 15,000 crore in one or two weeks, market sources told ET.

Indian Railways Finance is aiming to raise about Rs 5,000 crore. It is already in talks with the Employees’ Provident Fund Organisation (EPFO) and is also set to hold discussions with potential investors this week.

These borrowers did not reply to ET’s queries. EPFO could not be contacted immediately for comment.

“The company always seeks to rationalise its fund costs, which may rise in coming days,” said a senior executive involved in the matter.

State Bank of India is set to launch its Additional Tier 1 bond sales this week, aiming to raise up to Rs 6,000 crore.

“Changing rate sentiment will drive borrowers to raise money, particularly when the economy is reopening,” said Mahendra Jajoo, chief investment officer – fixed income, at Mirae Asset Investment Manager (India).

It is natural for companies rushing to garner funds before they turn costlier, he said. “Bond Street should witness heightened activities in the coming days.”

The RBI discontinued the Government Securities Acquisition Programme in the last credit policy. It is billed as a step for liquidity normalisation.

The central bank also proposed to conduct the 14-day long-term variable rate reverse repo (VRRR) auctions on a fortnightly basis for a total estimated amount of Rs 25 lakh crore by December 3. This will suck out excess money out of the banking system that has a surplus of Rs 7.83 lakh crore now versus Rs 8.33 lakh crore at the beginning of the month.

“Market is now fairly convinced about RBI’s objective, which in turn is already reflecting in some of the money market rates and benchmark bond yields,” said Ajay Manglunia, managing director – head of institutional fixed income, at JM Financial.

“Borrowers are engaging with arrangers or directly talking to potential investors to raise debt via bonds before the rates start moving one-way northward,” he said.

The benchmark bond yield rose as much as 17 basis points in the past three weeks, raising overall funding costs.

At a 14-day VRRR auction last Friday, the cut-off rate, above which none can bid, yielded almost 4%, on par with the repo at which banks borrow money from the RBI. It was 3.60% in the previous fortnight.

Before that on September 28, the 7-day VRRR cut-off yield came at 3.99%, twisting interest rate sentiment compared with 3.38% the preceding fortnight.

In the past one-week, corporate bond sales totalled just about Rs 1,000 crore, much less than usual volumes. Investors chose to stay off from the bond street ahead of the RBI’s monetary policy that was widely anticipated to spell out a stance on liquidity.



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Forex reserves down by $1.169 billion to $637.477 billion, BFSI News, ET BFSI

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The country’s foreign exchange reserves dipped by USD 1.169 billion to stand at USD 637.477 billion in the week ended October 1, RBI data showed on Friday. In the previous week ended September 24, 2021, the reserves had declined by USD 997 million to USD 638.646 billion. The reserves had surged by USD 8.895 billion to a lifetime high of USD 642.453 billion in the week ended September 3, 2021.

During the reporting week ended October 1, 2021, the dip in the forex kitty was on account of a fall in the foreign currency assets (FCAs), a major component of the overall reserves.

FCAs declined by USD 1.28 billion to USD 575.451 billion, as per weekly data by the Reserve Bank of India (RBI).

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves were up by USD 128 million to USD 37.558 billion in the reporting week, the data showed.

The special drawing rights (SDRs) with the International Monetary Fund (IMF) declined by USD 138 million to USD 19.24 billion.

The country’s reserve position with the IMF increased by USD 122 million to USD 5.228 billion.

Also read:

“Real GDP in the current fiscal year is expected to grow by 8.3%, which is consistent with the last forecast from June 2021, and a 1.8 percentage point downward revision from the forecast in March 2021,” said the World Bank’s Fall 2021 economic update for South Asia.

“The sequential momentum in growth has slowed down or moderated a bit in the September quarter; it is likely to pick up in the December and the March quarter starting with the festive season spends.”



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RBI, BFSI News, ET BFSI

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Mumbai, The Reserve Bank of India is reviewing its scheme of penalising banks for non-replenishment of ATMs after getting feedback from lenders, its Deputy Governor T Rabi Sankar said on Friday. In August this year, RBI had announced that it will penalise banks for failure to timely replenish currency notes in ATMs. The scheme, which is aimed at ensuring availability of sufficient cash for the public through ATMs, has come into effect from October 1, 2021.

“We have received various feedback– some positive and some raising concerns. There are issues specific to locations. We are trying to take all the feedback and have a review and see how best it can be implemented,” Sankar told reporters in a post policy call with reporters on Friday.

He said the idea behind the penalty on outages in ATMs is to ensure that cash is available in all ATMs, specially in rural and semi urban areas, all the time.

As per the scheme, cash-out of more than ten hours at any ATM in a month will attract a flat penalty of Rs 10,000 per ATM.

In case of White Label ATMs (WLAs), the penalty would be charged on the bank which is meeting the cash requirement of that particular WLA.

Replying to a query on lower interest rates affecting senior citizens due to fall in fixed deposit rates amid higher inflation, RBI Governor Shaktikanta Das said the cut in repo rate was considered absolutely necessary during the pandemic to support the economy.

“If you are not able to support the overall economy which is collapsing or is moving into a contraction zone, then there would be other major issues for all, including for senior citizens,” he told reporters.

He, however, said one should invest in small savings schemes that are currently offering much higher rates than their actual formula-based rates.

Citing an example, he said the one-year term deposit rate in small savings schemes is at least 170-180 basis points higher than the actual rate which is arrived at by the guidelines.

“In this crisis situation, we should see this (small savings scheme rates) as a fiscal support to senior citizens and middle class and small savers,” Das said. PTI HV

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Coming soon, new framework for offline digital payments

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In a move to broaden the reach and use of digital payments, the Reserve Bank of India has proposed to introduce a framework for carrying out retail digital payments in offline mode across the country.

This would enable customers to use digital payment modes even without internet connectivity.

The Statement on Developmental and Regulatory Policies on August 6, 2020, had announced a scheme to conduct pilot tests of innovative technology that enables retail digital payments even in situations where internet connectivity is low or not available (offline mode).

“Three pilots were successfully conducted under the Scheme in different parts of the country during the period from September 2020 to June 2021, involving small-value transactions covering a volume of 2.41 lakh for the value of ₹1.16 crore,” said RBI Governor Shaktikanta Das on Friday.

Also see: Leading companies come together to set up Merchants Payments Alliance of India

At present, digital payment modes like the vastly popular Unified Payments Interface require internet connectivity and a smartphone, and are used largely in Tier 1, 2 and 3 cities and towns.

e-RUPI

The government’s latest digital payments offering, e-RUPI, however, permits offline transactions, which can be carried out on feature phones and can be shared through an SMS or QR Code.

In recent months, a number of payment players have been working on offline payment solutions.

Offline chip-based card

Visa had, in August this year, announced that it is driving a Proof of Concept for offline digital payments along with Yes Bank and Axis Bank. Users can transact using chip-based Visa debit, credit and prepaid cards, even in places with low or no internet connectivity. The chip will hold a stored value of a daily spend limit of ₹2,000 and have a per transaction limit of ₹200, and would be akin to having a wallet with a preloaded amount.

‘Sound medium’

A number of players working on offline digital payments have also completed the test phase in the RBI’s first cohort under the Regulatory Sandbox with the theme of retail payments.

ToneTag is an offline, feature phone-based payment solution for peer-to-merchant transactions over ‘sound medium’ by establishing a secure channel for data transfer over interactive voice response (IVR) between devices and enables contactless payment even without internet.

Also see: Visa launches CoF tokenisation service for Grofers, BigBasket and MakeMyTrip

“This would enable even people who are not digitally savvy, those who may have a smartphone but not are comfortable linking their bank account to the phone, or even those without a smartphone, to be included in the financial inclusion spectrum. It can be adopted by different payment providers — banks, wallets and, new age payment players — to further scale their connections to a wider set of consumers,” said Kumar Abhishek, Founder and CEO, ToneTag.

Near-field communication

Similarly, PaySe is an offline digital cash product which proposes to help in digitisation of payments in rural areas, starting with self help groups (SHG), through an offline payment solution and a digitised SHG-centered ecosystem. It uses NFC (near-field communication) or Bluetooth low energy protocol for secure wireless offline payment mode.

Others like Ubona Technologies (BHIM Voice) and Eroute Technologies have also worked on offline payment solutions.

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RBI turns to mopping up liquidity

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Even as the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged and retain the accommodative policy stance to support economic recovery, the Reserve Bank of India on Friday stepped up the focus on liquidity management.

The central bank outlined measures for a calibrated draining out of surplus liquidity from the banking system via enhanced variable rate reverse repo (VRRR) auctions of 14 days and suspending G-SAP (Government Security Acquisition Programme).

On the repo rate, the MPC voted unanimously to maintain the status quo. But the decision to retain the accommodative policy stance was voted 5 to 1 with Jayanth R Varma dissenting. Members had voted on similar lines at the Augustmeeting.

The policy repo rate has been static since May 2020, when it was reduced from 4.40 per cent to 4 per cent. Explaining the rationale for holding the rate, RBI Governor Shaktikanta Das said, “Growth impulses seem to be strengthening and we derive comfort from the fact that the inflation trajectory is turning out to be more favourable than anticipated.”

 

 

Liquidity normalisation

In view of the liquidity overhang in the banking system of more than ₹13-lakh crore, the RBI said it will conduct 14-day VRRR auctions and also stop G-SAP. It announced a fortnightly calendar for VRRR auctions.

These two steps indicate that the central bank is preparing to drain out surplus liquidity. “Our entire approach is one of gradualism. We don’t want suddenness. We don’t want surprises,” Das said. “…And more so, we do realise that as we are approaching the shore, when the shore is so close, we don’t want to rock the boat because we realise that there is a life, there is a journey beyond the shores.”

On Friday, the RBI rolled out the first VRRR auction, whereby it sucked out ₹4-lakh crore. The size of each subsequent fortnightly auction will be increase by ₹50,000 crore, culminating in a ₹6-lakh-crore VRRR auction on December 3. Depending upon the evolving liquidity conditions — especially the quantum of capital flows, the pace of government expenditure and the credit offtake — the RBI may also consider complementing the 14-day VRRR auctions with 28-day VRRR auctions in a similar calibrated fashion, the Governor said.

MD Patra, Deputy Governor, said: “Now, the (VRRR) auctions have two benefits for us — they enable better pricing of excess reserves and they give the RBI a better handle on these reserves by giving some more discretion in managing liquidity.”

Even with all these operations, the liquidity absorbed under the fixed rate reverse repo would be ₹2-3 lakh crore in the first week of December.

Rajkiran Rai G, Chairman of Indian Banks’ Association and MD & CEO of Union Bank of India, said: ”As was widely expected, the RBI has given a roadmap for the tapering of the excess liquidity from the system in a calibrated manner without disrupting the government borrowing programme or the liquidity needs of the economy.

Crisil, in a report, noted that the normalisation could continue in the coming months and a hike in the repo rate by 25 basis points by fiscal 2022-end, assuming strengthening economic recovery and elevated inflation risks. The MPC revised downwards its retail inflation projection for FY22 to 5.3 per cent against the earlier 5.7 per cent even as it retained its projection for real GDP growth at 9.5 per cent.

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RBI working on offline digital payments framework, hikes IMPS limit to Rs 5 lakh

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The per-transaction limit in IMPS, effective from January 2014, is currently capped at Rs 2 lakh for channels other than SMS and IVRS, for which it stands at Rs 5,000.

The Reserve Bank of India (RBI) on Friday made a series of announcements on the payments system, including an increase in the per-transaction limit for Immediate Payment Service (IMPS) to Rs 5 lakh from Rs 2 lakh and the introduction of geo-tagging for payment system touch points.

The per-transaction limit in IMPS, effective from January 2014, is currently capped at Rs 2 lakh for channels other than SMS and IVRS, for which it stands at Rs 5,000. “With RTGS now operational round the clock, there has been a corresponding increase in settlement cycles of IMPS, thereby reducing the credit and settlement risks. In view of the importance of the IMPS system in processing of domestic payment transactions, it is proposed to increase the per-transaction limit from Rs 2 lakh to Rs 5 lakh for channels other than SMS and IVRS,” the central bank said in its statement on developmental and regulatory policies.

Madhusudanan R, co-founder, M2P Fintech, said that the increase in the IMPS transaction limit is significant because the Unified Payments Interface (UPI) is based on that system and a whole host of peer-to-peer (P2P) payments and initial public offer (IPO) payments will be simplified as a result. “It will also help take some of the load off the RTGS system and allow banks to focus better on liquidity management. This takes care of nearly 90% of retail payments,” he said.

To ensure a balanced spread of acceptance infrastructure across the country, it is essential to ascertain location information of existing payment acceptance infrastructure, the RBI said. In this regard, geo-tagging technology, by providing location information on an ongoing basis, can be useful in targeting areas with deficient infrastructure for focussed policy action. The central bank accordingly proposed to lay down a framework for geo-tagging, or capturing of geographical coordinates, of physical payment acceptance infrastructure, such as point of sale (PoS) terminals and quick response (QR) codes used by merchants. This would complement the Payments Infrastructure Development Fund (PIDF) framework by better deployment of acceptance infrastructure and wider access to digital payments, the RBI said.

Industry players said that while the thinking behind this regulation was not immediately clear, the regulator may be looking at it as a means of making non-bank fintech players more responsible for the merchants they acquire. Geo-tagging will promote wider deployment of payment infrastructure such as POS terminals and QR codes, said Shivaji Thapliyal, lead analyst — institutional equities, Yes Securities. “This will be positive for fee income for banks in the long run on the acquirer side business,” he said.

Additionally, the RBI said that under a scheme to conduct pilot tests for enabling retail digital payments in the offline mode, three pilots were successfully conducted in different parts of the country between September 2020 and June 2021. The pilots involved small-value transactions covering a volume of 2.41 lakh for a value of Rs 1.16 crore. The central bank concluded that there is a scope to introduce such solutions, especially in remote areas. “Given the experience gained from the pilots and the encouraging feedback, it is proposed to introduce a framework for carrying out retail digital payments in offline mode across the country,” the RBI said.

The central bank announced that the fourth cohort under its regulatory sandbox will be on prevention and mitigation of financial frauds. The focus would be on using technology to reduce the lag between the occurrence and detection of frauds, strengthening the fraud governance structure and minimising response time to frauds, the RBI said. Further, based on the experience gained and the feedback received from stakeholders, the central bank plans to facilitate on-tap application for themes of cohorts earlier closed. The three cohorts were on retail payments, cross-border payments and MSME lending.

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