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

Written by Abhinav Garg

The limit per transaction in IMPS, as of January 2014, is currently capped at Rs 2 lakh for channels other than SMS and IVRS, for which it amounts to Rs 5,000.The limit per transaction in IMPS, as of January 2014, is currently capped at Rs 2 lakh for channels other than SMS and IVRS, for which it amounts to Rs 5,000.

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

The limit per transaction in IMPS, as of January 2014, is currently capped at Rs 2 lakh for channels other than SMS and IVRS, for which it amounts to Rs 5,000. “The RTGS is now operational 24 hours a day. , there has been a corresponding increase in IMPS settlement cycles, thereby reducing credit and settlement risks. Considering the importance of the IMPS system in the processing of national payment transactions, it is proposed to increase the limit per transaction from Rs 2 lakh to Rs 5 lakh for channels other than SMS and IVRS ”, the bank said. central in its press release. on development and regulatory policies.

Madhusudanan R, co-founder of M2P Fintech, said the increase in the IMPS transaction limit is important because the Unified Payment Interface (UPI) is based on this system and on a multitude of peer-to-peer payments. (P2P) and initial Payments for public offers (IPO) will be simplified. “It will also help alleviate some of the load on the RTGS system and allow banks to better focus on liquidity management. It supports almost 90% of retail payments, ”he said.

To ensure a balanced distribution of the acceptance infrastructure across the country, it is essential to verify the location information of the existing payment acceptance infrastructure, the RBI said. In this regard, geolocation technology, by providing location information on an ongoing basis, can be useful in targeting areas with poor infrastructure for targeted policy action. The central bank has therefore proposed to define a framework for geolocation, or capture of geographic coordinates, of the physical infrastructures for accepting payments, such as point of sale (PoS) terminals and the rapid response codes (QR) used. by traders. This would complement the Payment Infrastructure Development Fund (PIDF) framework with better deployment of acceptance infrastructure and wider access to digital payments, the RBI said.

Industry players said that while the idea behind this regulation was not immediately clear, the regulator might see it as a way to make non-bank fintech players more responsible for the merchants they acquire. Geolocation will promote wider deployment of payment infrastructures such as point-of-sale terminals and QR codes, said Shivaji Thapliyal, chief analyst – institutional stocks, Yes Securities. “This will be positive for commission income for long-term banks on the acquiring side,” he said.

In addition, the RBI said that as part of a program to conduct pilot tests to enable retail digital payments in offline mode, three pilots were successfully conducted in different parts of the country between September 2020 and June. 2021. The pilots involved low value transactions covering a volume of 2.41 lakh for a value of Rs 1.16 crore. The central bank concluded that it was possible to introduce such solutions, especially in remote areas. “Based on the experience gained from the pilots and the encouraging feedback, it is proposed to introduce a framework for making offline digital retail payments across the country,” the RBI said.

The central bank has announced that the fourth cohort of its regulatory sandbox will focus on preventing and mitigating financial fraud. The focus would be on using technology to reduce the lag between the occurrence and detection of fraud, strengthening the governance structure for fraud and minimizing response time to fraud, the RBI said. In addition, based on the experience gained and feedback received from stakeholders, the central bank plans to facilitate on-the-job application for the themes of cohorts closed earlier. The three cohorts covered retail payments, cross-border payments and loans to MSMEs.

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Abhinav Garg

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