The Reserve Bank of India (RBI) has also allowed non-banks to participate in its Centralized Payment System (CPS) like Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) system. The Reserve Bank says that it will be implemented in a phased manner.
Access for Non-banks to Centralised Payment Systemshttps://t.co/gyOznjQzPa
— ReserveBankOfIndia (@RBI) July 28, 2021
RBI had said in April itself that non-banks will be allowed to use CPS like RTGS, NEFT, but in a phased manner. However, till now only banks are allowed to use the facilities of RTGS and NEFT payments. The Reserve Bank is trying to accelerate digital payments by increasing access to the payment system.
These institutions will be able to provide NEFT, RTGS facilities
RBI has said in its latest circular that prepaid payment instrument (PPI) issuers, card networks, white label ATM operators will be allowed to participate in CPS in the first phase. A statement issued by the RBI said that after a review of the existing arrangements and detailed discussions with Payment System Providers (PSPs), it is proposed that in the first phase, authorized non-bank PSPs, such as PPI issuers , card networks and white label ATM operators will be its direct members. This means that these institutions will be able to provide facilities like NEFT and RTGS to their customers.
These institutions will be included in the CPC
Apart from banks, so far only a select few non-banks have been allowed to participate in CPS. Non-banks that have been granted membership/access to CPC include standalone primary dealers, clearing corporations of stock exchanges, central counter parties, retail payment systems organisations, select financial institutions such as NABARD, EXIM Bank and DICGC. A separate IFSC will be allotted to a non-bank with direct access to CPS, who can open a current account with the Reserve Bank in its Core Banking System (E-Kuber) and maintain a settlement account with RBI. could.
There will be less risk of payment failure
RBI said that direct access of non-banking institutions to CPS will reduce the risk in the payment system. It will also prove beneficial for non-banks. This will reduce their payment cost and reduce their dependence on banks. When non-banks can make direct payments, then the risk of failure of payment will be reduced as well as the cases of delay in payment will also be reduced.
