Overview
- New guidelines
- RBI proposes new regulation for offline payment aggregators
Here are some important guidelines and rules issued by the Reserve Bank of India (RBI) for April 2024:
- Master Circular - Prudential Norms on Capital Adequacy - Primary (Urban) Co-operative Banks (UCBs):
- This circular provides norms related to capital adequacy for Primary (Urban) Co-operative Banks (UCBs). It consolidates and updates all instructions and guidelines issued up to March 31, 20241.
- UCBs must maintain a minimum net worth of ₹2 crore for those operating in a single district and ₹5 crore for all other UCBs (across tiers). UCBs not meeting these requirements must achieve them in a phased manner by March 31, 20281.
- The circular also outlines capital adequacy norms and risk-weighted asset ratios for UCBs1.
- Revised Fair Lending Practices:
- Effective from April 1, 2024, revised fair lending practices prohibit banks and non-banking financial companies (NBFCs) from using penal charges on loan defaults as a revenue generation tool.
- Both retail and corporate borrowers will face identical penalties for the same loan product.
These guidelines aim to enhance transparency, protect borrowers, and strengthen the financial system.
RBI proposes new regulation for offline payment aggregators
The Reserve Bank of India (RBI) has introduced a framework to facilitate small-value digital payments in offline mode. Here are the key details:
- Definition of Offline Digital Payment:
- An offline digital payment refers to a transaction that does not require internet or telecom connectivity.
- Under this new framework, such payments can be conducted face-to-face (proximity mode) using various channels or instruments like cards, wallets, and mobile devices.
- Importantly, these transactions do not require an Additional Factor of Authentication (AFA).
- Transaction Limits:
- The framework allows for offline payments up to ₹200 per transaction.
- There is also an overall limit of ₹2,000 for all transactions until the account balance is replenished.
- Balance replenishment can only occur in an online mode.
- Customer Consent and Protection:
- Specific consent from the customer is required to enable the offline mode of payment.
- Customers will receive transaction alerts (via SMS and/or email) after a time lag due to the offline nature of the transactions.
- Customers enjoy protection under the provisions of circulars limiting customer liability issued by the RBI, and they can seek recourse through the Reserve Bank – Integrated Ombudsman Scheme for grievance redress1.
- Promoting Digital Transactions:
- Offline transactions are expected to boost digital payments in areas with poor or weak internet or telecom connectivity, especially in semi-urban and rural regions1.
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