Regulatory and Developmental Policy Measures for Banking and FinTech

I. Regulations

1. Review of Bulk Deposit Limits for Scheduled Commercial Banks, Small Finance Banks, and Local Area Banks

Banks have the discretion to offer different interest rates on bulk deposits based on their needs and Asset-Liability Management (ALM) projections. In 2019, the bulk deposit limit for Scheduled Commercial Banks (SCBs) (excluding Regional Rural Banks) and Small Finance Banks (SFBs) was set at ‘Single Rupee term deposits of ₹2 crore and above’. It is now proposed to revise this limit to ‘Single Rupee term deposits of ₹3 crore and above’ for SCBs (excluding RRBs) and SFBs. Additionally, the bulk deposit limit for Local Area Banks will be defined as ‘Single Rupee term deposits of ₹1 crore and above’, similar to RRBs. Necessary guidelines will be issued soon.

2. Rationalisation of Export and Import Regulations under FEMA, 1999

To enhance operational flexibility for Authorized Dealer banks and align with global trade dynamics, the Reserve Bank has decided to rationalize existing guidelines on the export and import of goods and services. This aims to simplify operational procedures and promote ease of doing business for stakeholders. Draft regulations and directions will be posted on the Bank’s website by the end of June 2024 for stakeholder feedback before finalization.

II. Payment Systems and Fintech

3. Establishing a Digital Payments Intelligence Platform

To maintain public confidence in digital payment systems and minimize fraud, the Reserve Bank proposes to set up a Digital Payments Intelligence Platform. This platform will use advanced technologies to reduce payment fraud risks. A committee, chaired by Shri A.P. Hota, former MD & CEO of NPCI, has been formed to examine the setup of this digital public infrastructure. The committee will provide recommendations within two months.

4. Inclusion of Recurring Payments for Fastag, NCMC, etc. with Auto-Replenishment under the e-Mandate Framework

(i) The e-Mandate Framework, issued on January 10, 2020, currently supports recurring payments with fixed periodicity. It is now proposed to include payments like Fastag and NCMC, which are recurring but without fixed periodicity, under this framework. Automatic replenishment will be triggered when the balance falls below a threshold set by the customer.

(ii) The current e-mandate framework requires a pre-debit notification at least 24 hours before the actual debit. This requirement will be waived for automatic replenishment of balances in Fastag, NCMC, etc., under the e-mandate framework. Necessary guidelines will be issued soon.

5. Introducing Auto-Replenishment for UPI Lite Wallet under the e-Mandate Framework

The UPI Lite facility allows loading up to ₹2000 and making payments up to ₹500 from the wallet. To enable seamless use, it is proposed to include UPI Lite under the e-mandate framework with an auto-replenishment facility. This will activate when the balance goes below a customer-set threshold. As funds remain with the customer, additional authentication or pre-debit notification will not be required. Guidelines will be issued soon.

6. RBI Hackathon HARBINGER 2024 – Innovation for Transformation

RBI continues to prioritize trust, safety, security, and inclusivity in the financial system. The third edition of the global hackathon, “HaRBInger 2024 – Innovation for Transformation”, will focus on ‘Zero Financial Frauds’ and ‘Being Divyang Friendly’. Solutions enhancing the safety and security of digital transactions and promoting inclusivity for persons with physical disabilities will be invited. Further details will be released soon.