Payment and Settlement Systems Developments and Challenges

Transcription

1 Payment and Settlement Systems Developments and Challenges Ms. Charulatha Kar Reserve Bank of India SAARC Finance Seminar Kathmandu, Nepal 05 September,

2 2 Presentation Overview Developments in Payment Systems: CPSS Regional aspects of Payment systems Payment systems in India Payment System Vision Legal and Regulatory Framework Developments in Retail Payments Developments in Large Value Payments The Way Ahead Policy challenges

3 Developments in Payment Systems: CPSS Harmonisation of standards - Principles for FMIs Innovations in Retail Payments Cyber Security Non-banks in Retail Payments Virtual Currencies 3

4 Regional Developments: Overview Strengthening legal framework Setting up of Common / National Payment switch Mobile payments Financial inclusion Role of non-banks; particularly banking 4 agents

5 5 Payment Systems in India: An overview

6 Payment System Vision To proactively encourage electronic payment systems for ushering in a less-cash society in India and to ensure payment and settlement systems in the country are safe, efficient, interoperable, authorised, accessible, inclusive and compliant with international standards. 6

7 Legal and Regulatory Framework Payment and Settlement Systems Act, 2007 Designates RBI as the authority for regulation and supervision of payment systems Authorisation of payment systems Regulatory and Supervisory powers to call for returns, access to information, inspect and audit; issue directions, penalties and fines Legal recognition to netting and settlement finality Board for Regulation and Supervision of Payment and Settlement Systems Regulations,

8 8 Developments in Retail Payments...

9 9 Non-Cash Payments: Developments

10 Paper-based Clearing MICR-based clearing (66 CPCs) being replaced by image-based clearing (Cheque Truncation System- CTS) 3 grid locations NPCI is the operator of CTS; Management with RBI Migration to CTS-2010 cheque standards Paper-to-Follow arrangement Setting up images national archive for storage of CTS 10

11 Retail Electronic Payments Faster Payments : National Electronic Funds Transfer (NEFT) Immediate Payment System (IMPS) Bulk Payments: NECS/RECS/ECS NACH Card Payments: Credit / Debit Cards domestic RuPay cards Prepaid cards banks and non-banks 11

12 Facilitating Electronic Payments White Label ATMs - Building infrastructure Card Payments strengthening security of transactions as well as acceptance infrastructure; rationalisation of merchant services charges Aadhaar-based Payment Systems Domestic Money Transfer 12

13 Securing Electronic Transactions An additional factor of authentication (2FA) - has been mandated for all Card Not Present transactions Real Time on-line alerts (SMS or ) for usage of card at any delivery channel PIN validation made mandatory for successive transactions at ATMs 13

14 14 Securing Card Transactions Recent developments: All new cards to be issued only for domestic use Cards for international use to be issued only on the request of customer International cards to be only CHIP and PIN Convert existing magstripe card to Chip card if it is used internationally Active magstripe international cards to have a threshold value for international usage PIN@POS requirement mandated for debit cards Security of infrastructure: TLE / UKPT/DUKPT / PCI DSS

15 New RTGS System Launched on 19 October Features of NG-RTGS ISO format messaging Liquidity saving features Bilateral and multi-lateral off-setting Bilateral and multi-lateral exposure limits Future value date transactions Hybrid settlement Multi-currency feature

16 The Way Ahead... BBPS Bharat Bill Payment System Mobile Banking standards and procedures TReDS Trade Receivables and Discounting System 16

17 17 Policy Challenges...

18 Policy Challenges Largely cash-based society Financial inclusion Large number of migrant population Financial literacy Increasing complexity of non-cash payments and accessibility to such payment channels Lop-sided development of infrastructure Security and consumer protection issues 18

19 Role of Various Stakeholders Role of Central Bank CB as an operator CB as a catalyst CB as oversight authority Role of Government agencies Role of Banks Role of Non-banks 19

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