NEFT, RTGS money transfer services extended beyond banks.
The Reserve Bank of India (RBI) on Wednesday (April 7) extended National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) facilities beyond banks. RBI Governor Shaktikanta Das announced that the services can now be used by non-bank payment operators as well. So far, only banks were allowed to use these (RTGS and NEFT) payments facilities.
Now, the issuers of Prepaid Payment Instrument (PPI), card networks, White label ATM operators and Trade Receivables Discounting System (TReDS) platforms can use these two modes.
As mentioned, this change has been made in order to encourage participation of non-banks across payment systems.
RBI governor Shaktikanta Das said, "Membership to the RBI-operated Centralised Payment Systems (CPSs) – RTGS and NEFT – is currently limited to banks, with a few exceptions. It is now proposed to enable non-bank payment system operators like Prepaid Payment Instrument (PPI) issuers, card networks, White label ATM operators and Trade Receivables Discounting System (TReDS) platforms regulated by the Reserve Bank, to take direct membership in CPSs. This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments."
"The main aim of this whole change is to encourage participation of non-banks across payment systems," Das added.
A statement by RBI stated, "This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments. These entities will, however, not be eligible for any liquidity facility from RBI to facilitate settlement of their transactions in these CPSs. Necessary instructions will be issued separately."
On the other side, RBI also increased the maximum end of day balance for payment banks to Rs 2 lakh. Earlier, the limit was Rs 1 lakh. Payments banks have been asking a hike in deposit limit for a long time.
