Page 43 - BANKING FINANCE APRIL 2024

ARTICLE

of external traffic. The NPCI board and the RBI provide even in areas with poor connectivity, such as underground
constant oversight, diligently monitoring risks to safeguard stations, remote areas, etc. UPI LITE X will be accessible to
the integrity and security of these critical systems. Cyber anyone with a compatible device that supports Near Field
security requires persistent vigilance and adaptation to stay Communication (NFC).
ahead of potential threats.
Hello! UPI - Conversational Payments on UPI: The
Conclusion introduction of conversational UPI payments will augment

Absolutely, NPCI is continually innovating and introducing user experience by enabling them to make voice-enabled
various features to progress towards the goal of achieving UPI payments via UPI Apps, telecom calls, and IoT devices
one billion transactions per day. in Hindi and English.

Credit Line on UPI: This new offering enables pre-sanctioned BillPay Connect - Conversational Bill Payments: With BillPay
credit lines from banks via UPI and will revolutionize Connect, Bharat BillPay introduces a nationalized number
customer access to credit, fostering a more streamlined and for bill payments across India. Customers can now
digital banking ecosystem. conveniently fetch and pay their bills by sending a simple
‘Hi’ on the messaging app.
UPI LITE X and Tap & Pay: Building on the success of UPI
LITE feature, the RBI Governor launched UPI LITE X for These advancements aim to diversify the functionality of
Offline payments. Through this feature, users can now both offerings by NPCI, making it more versatile, user-centric, and
send and receive money whilst being completely offline, accessible for a wider range of transactions, contributing to
therefore, allowing users to initiate and execute transactions the growth of digital payments in India.

RBI gives banks and NBFCs a breather on AIF investments

The Reserve Bank of India cushioned the blow on banks and NBFCs that invest in Alternative Investment Funds (AIFs).
The investments will exclude equity investments, but debt and hybrid instruments will continue to face additional
curbs the regulator had announced earlier. It also eased the provisioning requirements, giving relief to banks at the
end of the fiscal year.
The RBI has also exempted investments by regulated entities (RE) in AIFs through intermediaries such as fund of
funds or mutual funds. This could result in reversal of some of the AIF provisions which weighed on the performance
of banks and NBFCs in the third quarter ended December 2023. For instance, Kotak Mahindra Bank had made a
provision of 190 crore and RBL Bank had made a contingent provision of 115 crore on AIF investment.
"With a view to ensuring uniformity in implementation among the REs, and to address the concerns flagged in vari-
ous representations received from stakeholders, it is advised that downstream investments shall exclude investments
in equity shares of the debtor company of the RE, but shall include all other investments, including investment in
hybrid instruments," RBI said in the circular.
The RBI has said that provisioning will be required only to the extent of the RE's investment in the AIF scheme that
is further invested in the debtor company, rather than on the entire investment in the AIF scheme.
"The RBI has addressed the issue regarding equity investments by AIFs in debtor companies of regulated entities,
clarifying that these will no longer be a provisioning or investment concern for regulated entities who are already
investors or looking to invest in such AIFs," said Tejesh Chitlangi, Joint Managing Partner, IC Universal Legal.

BANKING FINANCE | APRIL | 2024 | 39