CHENNAI: The Reserve Bank of India (RBI) increased the UPI transaction limit for medical and educational services from Rs 1 lakh to Rs 5 lakh. The Central bank, which also kept interest rates flat, announced various regulatory measures in the UPI and fintech ecosystem and financial markets.
e-Mandates limit: RBI has exempted e-mandates additional factor authentication (AFA) for transactions up to Rs 1 lakh for subscription to mutual funds, payment of insurance premium and payments of credit card bills.
The other existing requirements such as pre- and post-transaction notifications, opt-out facility for users will continue, it said. A revised circular in this regard will be issued shortly.
Currently, e-Mandates for making payments of recurring transactions exceeding Rs 15,000 will require additional factor of authentication. RBI said this measure will further accelerate the usage of e-mandates.
The number of e-mandates registered currently stands at 8.5 crore, processing nearly ₹2800 crores of transactions per month.
Setting up of Fintech Repository: RBI has announced its decision to set-up a Fintech Repository for better understanding of developments in the fintech ecosystem.
This will be operationalised by the Reserve Bank Innovation Hub in April 2024 or earlier. FinTechs would be encouraged to provide relevant information voluntarily to this Repository.
This comes amid increasing partnerships of financial entities like banks and NBFCs with Fintechs.
Establishment of Cloud Facility for the Financial Sector: The Reserve Bank in a statement said it is working on establishing a cloud facility for the financial sector in India, which would enhance data security, integrity and privacy. It would also facilitate better scalability and business continuity. The cloud facility is intended to be rolled out in a calibrated fashion over the medium term.
RBI noted that banks and financial entities are utilising various public and private cloud facilities.
Framework for Connected Lending: The Reserve Bank of India has decided to come out with a unified regulatory framework on connected lending for all regulated entities. The bank said this will further strengthen the pricing and management of credit by regulated entities.
Web-Aggregation of Loan Products: RBI has decided to lay down a regulatory framework for web-aggregation of loan products. This move is expected to result in enhanced customer centricity and transparency in digital lending.
RBI also noted that several concerns relating to such web-aggregation of loan products harming consumers’ interest have come to our notice.
Hedging of Foreign Exchange Risks: RBI said, based on market developments and feedback received from market participants, the extant regulatory framework for forex derivative transactions has been refined and consolidated under a single master direction. This will further deepen the
forex derivatives market by enhancing operational efficiency and ease of access for users.
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