RBI To Implement Pan-India Cheque Truncation System by this September 2020

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a)Observing that digital payments in the country have been growing rapidly, Reserve Bank of India makes a digital payments index (DPI) available from July 2020.

b)The Reserve Bank of India (RBI) had decided to implement a cheque truncation system across the country by September this year. The central bank said the cheque truncation system “has stabilised well”. Currently, this system is operational in some major cities since its introduction by the central bank in 2010.

c) Observing that digital payments in the country have been growing rapidly, the RBI said it would make a digital payments index (DPI) available from July 2020.

The DPI would be based on multiple parameters and shall reflect accurately the penetration and deepening of various digital payment modes.

d) With substantial growth in digital payments and maturity gained by entities in the payment ecosystem, it is desirable to have a self-regulatory organisation (SRO) for orderly operations of the entities in the payment system.

e) The Reserve Bank of India said it would also put in place a framework for establishing a self-regulatory organisation for the digital payment system by April 2020 with a view to fostering best practices in areas such as security, customer protection and pricing.

f) The SRO will serve as a two-way communication channel between the players and the regulator/supervisor, according to the RBI.

g) The RBI decided to allow regional rural banks – such as other commercial banks – to act as merchant acquiring banks using Aadhaar Pay, mobile app BHIM and Post of Sale (PoS) terminals, to provide cost-effective and user-friendly solutions to their customers. The central bank said it would issue detailed instructions in this regard later in the day.

h) In continuation of efforts to facilitate interoperability of government securities depositories, as announced in the Union Budget 2019-20, the RBI said it would modify its government securities registry (the PDO-NDS system) to include constituent details in the Constituent Subsidiary General Ledger (CSGL) accounts.

i) This is expected to fuel the interest of retail investors to invest in government securities, it said, adding the upgrade is expected to be made operational by end of July 2020.

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