Page 51 - Banking Finance January 2020

RBI CIRCULAR

undertaking from the proposed member of BoM/CEO acceptance. Currently, the NETC system allows linking
in the format enclosed to the guidelines in Appendix II. of FASTags with bank accounts – savings, current and
The process of due diligence shall also be undertaken prepaid.
at the time of renewal of appointment. 2. In order to further broad base this system by allowing
3. UCBs with deposit size of ?100 crore and above shall more payment choices for the customers, as well as
constitute BoM which will also be a mandatory for fostering competition among the system
requirement for allowing such banks to expand their participants, all authorised payment systems and
area of operation and open new branches. UCBs with instruments [non-bank PPIs, cards and Unified Payments
a deposit size less than ?100 crore and Salary Earners’ Interface (UPI)] shall from now be permitted for linking
Banks are exempted from constituting BoM. However, with the FASTags, which can be used for various types
for having good governance practices, such banks may of payments (vehicle toll, parking fee, etc.).
also constitute BoM, if they so desire. 3. The Turn Around Time (TAT) for resolving failed
4. Further, as per the guidelines, UCBs having deposit size transactions advised vide circular DPSS.CO.PD No.629/
of ?100 crore and above shall obtain prior approval of 02.01.014/2019-20 dated September 20, 2019 shall also
Reserve Bank for appointment of CEO. In this be applicable to the transactions carried out in the
connection, it is advised that Scheduled UCBs shall NETC system.
approach the Department of Regulation of Reserve Bank 4. The transactions in the NETC system can be performed
for approval at least three months prior to the end of without any Additional Factor of Authentication (AFA)
tenure of the incumbent CEO. The banks shall submit the
and / or pre-transaction notification / alert.
proposal for appointment of CEO along with the
declaration-cum -undertaking of the CEO designate as 5. NPCI shall facilitate requests received from banks / non-
per Appendix II of these guidelines along with the list of banks in this regard.
supporting documents as given in Annex II. Non- 6. This directive is issued under Section 10 (2) read with
Scheduled UCBs shall approach the concerned Regional Section 18 of the Payment and Settlement Systems Act,
Office of the Department of Supervision for the requisite 2007 (Act 51 of 2007).
approval in the similar manner mentioned above.
Reserve Bank reserves the right to seek additional (P. Vasudevan)
information/documents, if deemed necessary.
Chief General Manager
5. A copy of the amended bye-laws providing for
constitution of BoM shall be forwarded to the Introduction of a new type of semi-
concerned Regional Office of the Department of
Supervision for information and record along with closed Prepaid Payment Instrument (PPI)
details of the members of BoM immediately after – PPIs upto `` `` ` 10,000/- with loading only
constitution of BoM. UCBs shall also be required to
submit an annual return furnishing details of the from bank account
members of the BoM as per the format given in Annex RBI/2019-20/123
III as on December 31 each year, within 15 days of the December 24, 2019
end of the period to the respective Regional Offices of
the Reserve Bank of India. 1. Please refer to the Statement on Developmental and
Regulatory Policies issued as part of Monetary Policy
(Neeraj Nigam) Statement dated December 5, 2019 as also the Master
Chief General Manager Direction on Issuance and Operation of Prepaid
Payment Instruments (PPI-MD) issued vide
Enhancing facilitation of National DPSS.CO.PD.No.1164/02.14.006/2017-18 dated October
Electronic Toll Collection (NETC) system 11, 2017 (updated as on August 30, 2019).
2. To give impetus to small value digital payments and for
RBI/2019-20/126
enhanced user experience, it has been decided to
December 30, 2019 introduce a new type of semi-closed PPI with the
1. India is progressing ahead with NETC gaining large scale following features:

BANKING FINANCE | JANUARY | 2020 | 51