NEW DELHI: With digital payments now a part of everyday life for a large number of Indians, the Reserve Bank of India (RBI) has announced that it will prepare the way for an agency that will look after the interests of digital payment system customers and their security.
The rapid adoption of digital modes of payment for according to the central bank, the agency will be a self-regulatory organisation that will promote best practices in various aspects of the ecosystem, including customer protection, pricing and security. Wide spectrum of transactions has also led to a commensurate increase in the number of avenues available for exploitation by fraudsters.
According to government data, digital payment frauds account for nearly half of all bank frauds in India. Finance ministry data shows that frauds related to ATM/debit cards, credit cards and internet banking transactions of over Rs 1 lakh have surged sharply over the past few years, going from 1,367 frauds in FY17 to 2,127 in FY18 and 1,477 frauds in FY19.
“With substantial growth in digital payments and maturity gained by entities in the payment ecosystem, it is desirable to have a Self-Regulatory Organisation (SRO) for orderly operations of the entities. The RBI will put in place a framework for establishing an SRO by April 2020 with a view to fostering best practices on security, customer protection and pricing. The SRO will serve as a two-way communication channel between the players and the regulator/supervisor,” an RBI statement said.