Page 12 - Banking Finance May 2021

RBI CORNER

bi-monthly Monetary Policy Reviews. current limit on maximum end of day of the RBI's supervisory architecture
The last time the repo rate was balance of Rs. 1 lakh per individual thereof, T. Rabi Sankar, Executive
changed was in May, 2020, when it customer is being increased to Rs. 2 Director, said that the regulator's
was cut from 4.40% to 4%. Then the lakh with immediate effect." objective would always be to protect
reverse repo rate was also cut from Further, in an attempt to incentivise the customer and make transactions
3.75% to 3.35%. people to carry less cash and as safe as possible.

The second wave of COVID-19 and its consequently perform more digital "To that extent, like we have issued to
impact on the economy is expected to transactions, RBI has also proposed to banks recently, we are looking at
figure prominently in MPC's allow the facility of cash withdrawal, issuing guidelines that could lay down
deliberations. The committee is for full-KYC PPIs of non-bank PPI the basic minimum norms for
expected to persist with the issuers. cybersecurity and other security issues.
accommodative monetary policy As far as instances of such issues are
stance. RBI makes interoperability concerned, we are seized of those
Edelweiss Securities expects the RBI to mandatory for all wallet, matters and we are taking all the steps
required to reduce the possibility of
leave rates unchanged and stick to its PPI issuers
accommodative stance. In a report it such events," he added.
says, "Economic recovery is still uneven RBI has recently announced its
and the pace of improvement has decision to make interoperability RBI committee to help
mandatory for all full-KYC Prepaid
slowed of late after a sharp rebound ARCs realise their full
Payment Instruments (PPIs) and other
from lows (IIP has averaged just about payment infrastructure. The regulator potential
0.6% YoY in the past five months).
Further, the recent rebound in COVID wants to effectively bring wallets at RBI will constitute a committee to
par with bank accounts in terms of review the working of Asset
cases poses a fresh challenge. Thus,
service offerings. Reconstruction Companies (ARCs) and
continued policy accommodation is
very much warranted." Shaktikanta Das, Governor, RBI, help them realise their full potential,
expressed displeasure with the lack of RBI Governor Shaktikanta Das said
Rahul Bajoria, Chief India Economist, recently. The bank has proposed to
effort on the part of industry players
Barclays Securities (India) Pvt Ltd, and constitute a panel to recommend
Shreya Sodhani, Research Analyst, to voluntarily move towards suitable measures, enabling such
Barclays Investment Bank, Singapore, interoperability. RBI had issued entities to meet the growing
in a report, stated, "We believe the RBI guidelines in October, 2018 for requirements of the financial sector.
can maintain its monetary adoption of interoperability on a
voluntary basis for full-KYC PPIs. The announcement from RBI came at
accommodation for a while to enable
the recovery to become entrenched." According to Das, as the migration a time when the government has
towards interoperability has not been announced setting up an ARC and an
RBI raises accounts limit of significant, it will now be mandatory for Asset Management Company (AMC) to
full-KYC PPIs and for all payment help public sector banks dealing with
payment banks to Rs. 2 acceptance infrastructure. bad loans. "ARCs play an important
lakh Presently, cash withdrawal is allowed role in the resolution of stressed assets.
RBI has recently increased the only for full-KYC PPIs issued by banks. Their potential, however, is yet to be
maximum end of day balance for The allowing of cash withdrawals from fully realised," Shaktikanta Das stated.
payment banks to Rs. 2 lakh from Rs. all PPIs, in conjunction with the Dinesh Khara, Chairman, SBI, said that
1 lakh. mandate for interoperability, will boost the idea of setting up a committee to
migration to full-KYC PPIs and would review the working of ARCs could open
RBI governor Shaktikanta Das said,
also complement the acceptance up new vistas of faster resolution.
"With a view to furthering financial
infrastructure in Tier-III to -VI centres.
inclusion and to expand the ability of Similarly, RK Bansal, MD, Edelweiss
payments banks to cater to the Responding to a query about data ARC, remarked that the committee by
growing needs of their customers, the breaches at non-bank PPIs and the role RBI would be beneficial as the ARC

12 | 2021 | MAY | BANKING FINANCE