Page 34 - BANKING FINANCE MARCH 2024

ARTICLE

cater to the unbanked and underbanked population, at the ATM, customer shall be prompted to enter the
bridging the financial inclusion gap in the country. withdrawal amount. After entering the amount, a single use
dynamic QR code (signed) shall be displayed on the ATM
We are also witnessing revolutionizing "Interoperability" in screen. Customer needs to scan the QR code using any UPI
India's Digital Landscape. In an increasingly interconnected Application and authorize the transaction with UPI PIN on
world, interoperability has become the cornerstone of the mobile (UPI APP) to get cash from the ATM.
efficient and seamless communication. Nowhere is this more
evident than in India, a country that has embraced digital This is just one of the recent measures that indicate robust -
transformation at an unprecedented pace. The Indian digital growth-oriented world class banking landscape in India. In this
ecosystem is expanding rapidly, with various government comprehensive article, we will delve into different aspects,
initiatives, private sector innovations, and the proliferation exploring its significance, challenges, and the potential it holds
of smartphones and the internet. for transforming India's banking canvas. Some of the features
and initiatives are already in place making its presence felt
India's digital landscape is marked by fragmentation, with across the world, some initiatives reflect the growth mindset
different sectors and entities often using disparate systems - the way forward. Also, we shall be discussing challenges and
and technologies. Interoperability aims to unify these possible ways and means to mitigate.
diverse elements into a cohesive network. Interoperability
also, prioritizes inclusivity, ensuring that digital services are Open Banking and API Integration:
accessible to all, regardless of geographical location or
The Reserve Bank of India (RBI) has been at the forefront
socioeconomic status. This is vital for achieving the of promoting open banking initiatives in the country. Open
government's vision of a Digital India.
banking allows third-party financial service providers to
access customer banking data through secure application
Very recently , Reserve Bank of India unveiled "ICCW - programming interfaces (APIs). This facilitates the
Interoperable Card-less Cash Withdrawal". UPI-ATM development of innovative financial products and services
(Interoperable Card-less Cash Withdrawal) service. This by fintech companies, leading to enhanced customer
service shall facilitate participating banks' customers who experiences.
are live on UPI, to withdraw cash from any participating
banks' ATMs (enabled for UPI-ATM) without using their card.
The concept of open banking revolves around the secure
sharing of customer data with authorized third-party
Once the customer selects the option 'UPI cash withdrawal'
providers (TPPs) through standardized APIs. Open banking
fosters competition and innovation by enabling fintech
Step 1 Step 2 Step 3 startups to access banking data and
develop value-added services for
customers.
Customer selects the ATM will prompt the A single use dynamic
option customer to enter QR code (signed) shall Adopting open banking requires banks
'UPI cash withdrawal the withdrawal be displayed on ATM to develop robust API frameworks
at the ATM' amount screen
that adhere to security standards
while ensuring seamless data
transfer. The use of APIs also allows
Step 4 Step 5 Step 6 banks to collaborate with other
financial institutions and share
financial data in real-time, facilitating
User to scan the QR Once the amount is Cash is dispensed faster loan approvals and credit
code using any UPI App debited in UPI, user (for successful assessments commonly termed as
on his mobile, authorize to select transaction)
the transactions using 'Press here for cash' "STP - Straight Through Processing".
UPI Pin on the ATM
source :NPCI However, open banking also brings

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