RBI’s Monetary Policy Committee Meet: Four Customer-Centric Announcements Made

Shaktikanta Das, governor, Reserve Bank of India, has announced a slew of consumer-focused policies at the recently held monetary policy committee (MPC) meet that ended today. 

He also announced that the RBI has proposed the setting up of a new committee to review the customer services offered by banks, non-banking financial companies (NBFCs) as well as payment service operators regulated by the RBI.

Here are the four customer-focussed announcements made the RBI.

Customer Service Committee: In recent years, the RBI has taken several measures to enhance the customer protection framework. Some of these include a robust internal grievance measure, the ombudsman mechanism, and higher quality of customer service at institutions regulated by it.

In a further addition to its consumer-focussed step, the RBI has now proposed the setting up of a committee to examine and review the current state of customer service in RBI-regulated entities. This committee will consider the various developments and innovations in the financial ecosystem of India, and suggest measures to improve them.

“In view of the transformation underway in the financial landscape due to innovations in products and services, deepening of digital penetration and emergence of various service providers, it is proposed to set up a committee to examine and review the current state of customer service in the RBI-regulated entities, adequacy of the customer service regulations, and suggest measures to improve the same,” Das said at the MPC meet.

Secured Payments: The RBI has proposed to come out with some guidelines regarding cyber security and payment security control for payment processing system operators, such as payment gateways and card processing companies, among others. 

“Payment systems play a catalytic role in facilitating financial inclusion and promoting financial stability. To ensure that our payment systems remain resilient to conventional and emerging risks, specifically those relating to cyber security, we propose issuing guidelines on Cyber Resilience and Payment Security Controls for Payment System Operators,” he said.

Bharat Bill Payment System: This interoperable platform is used by millions of consumers to make utility and other bill payments. The RBI said that there had been an increase in the volume of bill payments and also the number of active billers over the years. So, in order to promote this facility and to encourage the participation of more non-bank Bharat bill payment operating units, it has proposed to reduce the net worth requirement from the present Rs 100 crore to Rs 25 crore.

"RBI has taken concrete steps to increase penetration of BBPS payment collection for merchants. The RBI has proposed reduction of net worth criteria for Non-Banking operating units from Rs 100 crore to Rs 25 crore. This move will further boost a large number of new players to enter the BBPS ecosystem and will thus increase the BBPS network in the country" said Dewang Neralla, Chief Executive Officer, NTT DATA Payment Services India Limited in a statement to the press.

Cash Withdrawals Using UPI: There is already a framework for card-less cash withdrawals, but the facility is not very widespread, at present, as only few ATM machines support that. The card-less cash withdrawal facility was made available to prevent various debit or credit card related frauds, such as card skimming, and card cloning, among others. To further enhance this card-less cash withdrawal facility, the RBI has proposed to make this available across all banks and ATM networks using the UPI network.

“The apex bank of India has today announced that card less ATM withdrawals will be made available across all bank ATMs. Although some banks have ATMs which allow these transactions, RBI governor Mr. Shaktikanta Das has announced this facility will now be available across all bank ATMs, and will be using the Unified Payments Interface (UPI) platform for the disbursal of cash. Soon all users will have greater freedom to withdraw money at their own convenience, without being restricted by a physical ATM card," said Dilip Modi, Founder, Spice Money, a rural India fintech company, in a statement to the press.

"Cardless cash withdrawals were introduced as a convenience innovation with focus on driving greater digital financial literacy.Many people believe it to be more secure and less prone to hacking or tampering (such as card skimming risk at ATMs)," said Amit Das, co-founder and chief executive officer at Think360.ai, a full-stack data science company.

“The absence of need for a card to initiate cash withdrawal transactions would help in containing frauds like skimming, card cloning, device tampering, etc. To encourage card-less cash withdrawal facility across all banks and all ATM networks/operators, it is proposed to enable customer authorisation through the use of UPI while settlement of such transactions would happen through the ATM networks,” Das said at the MPC meet.