Page 11 - BANKING FINANCE APRIL 2017

RBI CORNER

RBI lifts all limitations Lower MDR on card transactions from April 1
on cash withdrawals The Reserve Bank of India (RBI) has proposed that the merchant discount rate
(MDR or charge) on debit card transactions be
rationalised on the basis of turnover. Transactions
up to Rs. 2,000 do not attract a charge but this is
to end on March 31. The central bank issued draft
guidelines on its website that propose the MDR
be "on the basis of merchant turnover, rather than
the present slab-rate based on transaction value".

The Reserve Bank of India (RBI) has Besides, there should be differentiated MDR for the government and QR-code
lifted all restrictions on cash with- related transactions. In addition, there is a need to differentiate MDR between
drawals from savings bank accounts acquiring infrastructure involving physical terminals, including mobile point-of-
imposed on November 8, 2016 after sale, or mPOS, and digital acceptance infrastructure models such as QR code.
the withdrawal of Rs 500 and Rs
1,000 notes. RBI panel to review cyber threats
The Reserve Bank has declared to construct an inter-disciplinary standing com-
The RBI move has come after al-
mittee on cyber security to review the threats inherent
most four months since the Prime
in the existing and emerging technology. The 11-member
Minister first announced the with- committee will also study adoption of various security stan-
drawal of high value notes. Earlier, dards and protocols, interface with stakeholders and sug-
the RBI had removed all curbs on gest appropriate policy interventions to strengthen cyber
branch withdrawals from current security and resilience, the central bank said.
account, cash credit and overdraft
accounts on January 30 and limits Going forward, the committee headed by Meena Hemchandra, Executive Di-
placed on daily cash withdrawals rector, RBI, can co-opt more experts and also operate through a framework of
from ATMs from February 1. sub-committees to examine specific issues, it said. The RBI had issued guidelines
to banks in June last mandating cyber security preparedness to tackle risks.
The RBI lifted the restrictions in two
stages. It first allowed cash with- Not more than Rs 20,000 cash against gold: RBI
drawals up to Rs 50,000 from sav- The Reserve Bank of India (RBI) said non-banking financial companies (NBFCS)
ings bank account from February 20 cannot issue more than Rs20,000 in cash against gold
and then removed all restrictions on loans. "Currently, the relevant threshold under the In-
cash withdrawals from March 13.
come Tax Act, 1961 is Rs 20,000," said the notification.
"We are still compiling the data on Earlier, gold loans above Rs1 lakh were made manda-
the old notes. There are 4,000 cur- tory to be disbursed though cheques.
rency chests in India, apart from this
the RBI keeps the currency in 19 RBI could issue Rs 200 notes after June: reports
other places. The currency travels The Reserve Bank of India has accepted a proposal to issue Rs 200 notes, ac-
between these chests and the RBI. cording to reports. In fact, the printing of Rs 200 notes could begin after June.
After December 30, the RBI had The RBI board meeting in March decided to go ahead with the new notes.
asked all the banks to compile the
data on these old currencies and the However, there has be no official confirmation from the RBI so far. According to
RBI team has also finished checking a report, the new note is already in the pipeline and is only awaiting instructions
that data on sample basis. The pro- from the central government to go ahead with the printing procedure.
cess of reconciliation of the accounts "Rs 200 currency note is in the pipeline. But, unless it is notified by the central
is on. We hope that this will get over government, making a dye (block), working on security features and printing
in some time," RBI deputy governor process of Rs 200 would not take place. So this time, RBI would implement its
SS Mundra had said. plan only after the Centre's notification," a source told.

BANKING FINANCE | APRIL | 2017 | 11

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