In a bid to boost digital payments, the Reserve Bank on Friday announced a series of measures including raising the limit for contactless card transactions to Rs 5,000 and making the LBTR transaction facility available 24 hours a day. day from December 14. The RBI has also decided to license entities that operate payment systems in perpetuity, and allow companies to reapply for the license after one year of denial of their application or revocation of their license.
These were part of announcements made by RBI Governor Shaktikant Das earlier the day after the meeting of the central bank’s rate-setting panel, the Monetary Policy Committee. Now the central bank has issued circulars notifying the announcements. On the 24×7 availability of the real-time gross settlement system (RTGS), the RBI said that it has been decided “to make the RTGS available 24 hours a day every day of the year from 00:30 hours on 14 December 2020 “.
The LBTR system is used for high value transactions. The NEFT Payment System is now available 24 hours a day. LBTR will be available to clients and interbank transactions 24 hours a day, except in the interval between the ‘end of day’ and ‘start of day’ processes, whose schedules will be duly disseminated through the LBTR system.
The RBI also decided to increase the limit for contactless card transactions to Rs 5,000 from Rs 2,000 at point of sale (PoS) terminals from January 1, 2021 in view of the COVID-19
pandemic and stakeholder feedback. Earlier in the day, the RBI governor had announced that the limit per transaction for the relaxation of the additional factor of authentication (AFA) for contactless card transactions will be increased.
“Accordingly, given the sufficient protection available to users, it has been decided to increase the limit per transaction to 5,000 rupees,” one of the circulars said, adding that all other requirements, including the cardholder’s discretion to use the contactless or contactless mode of transaction would still apply. Similarly, the limit for processing electronic mandates and standing instructions on cards and prepaid payment instruments (PPI) for recurring transactions has been increased to Rs 5,000.
In both cases, the existing limit is Rs 2,000 per transaction. In another important decision, the RBI has decided to grant authorization for all OSPs (both new and existing) in perpetuity, subject to customary conditions, with the aim of reducing licensing uncertainties and allowing them to focus on business and optimize use of regulatory resources.
For existing authorized Payment System Operators (PSO), the grant of perpetual validity will be examined when the Certificate of Authorization (CoA) is necessary for its renewal. Currently, the RBI grants authorization to new entities that wish to operate a payment system for specific periods of up to five years. A similar approach is taken for the renewal of authorization validity for existing entities.
In another circular related to authorizing entities to operate a payment system, the RBI said that it has been decided to introduce the concept of “cooling off period” in certain situations to instill discipline and encourage the submission of applications by serious players such also for effective effects. use of regulatory resources. The cooling-off period would be one year from the date of revocation, non-renewal, acceptance of voluntary resignation or denial of application, as the case may be.
With respect to entities whose request for authorization is returned for any reason by the RBI, the cool-down period condition would be invoked after giving the entity an additional opportunity to submit the request.
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