RBI working on regulation to curb frauds in e-transactions
The Reserve Bank of India (RBI) is working to put in place a regulatory framework to address customer grievance and liability issues arising out of frauds in electronic transactions, the government said on Tuesday.business Updated: May 03, 2016 17:35 IST
The Reserve Bank of India (RBI) is working to put in place a regulatory framework to address customer grievance and liability issues arising out of frauds in electronic transactions, the government said on Tuesday.
“The matter is being further examined by the RBI to put in place a regulatory framework for addressing customer grievance and liability issues arising out of such frauds,” minister of state for finance Jayant Sinha said during the Question Hour in the Rajya Sabha.
He said the Banking Codes and Standards Board of India (BCSBI) had in 2014 come out with a recommendation of limiting the customer liabilities in case of frauds taking place through electronic channels.
Replying to supplementaries, Sinha said there was too much of cash transaction in the Indian economy.
“87% transaction happens in India in cash, which is not the case in other countries. So much use of cash transaction is not good...this increases cost of handling besides inconvenience,” he said and underlined the government’s commitment to encourage cashless financial transactions.
The RBI in its ‘Payment System Vision Document 2012-15’ for ushering in a less-cash economy suggested drawing up of a policy framework establishing roles and responsibilities of banks and customers in electronic transactions to minimise frauds, fix responsibilities and zero-liability protection to increase customer confidence.
The Document had also suggested drawing up a strategy for disincentivising usage of cheques above a certain threshold limit by customers and corporate, which may include prescribing a cut off limit for cheques cleared through clearing house arrangements.
Sinha said a white paper was placed by the department for public comments in 2013. “Based on the response from the public, the department has not initiated any further action”.
Sinha further said the government had come out with a white paper on disincentivising paper cheques and sought public comments on it.
“However, the comments were not very encouraging. The charges levied for electronic transactions operated by the bank are low and transparent,” he added.
Sinha further said that National Payments Corporation of India (NPCI) has been given in-principle approval to be the Bharat Bill Payment Central Unit (BBPCU) under Bharat Bill Payment System (BBPS), an integrated bill payment system.
BBPS is an integrated bill payment system to function as a tiered structure for operating bill payment system in India with a single brand image, providing convenience of ‘anytime anywhere’ bill payment to customers.
The present scope of BBPS will include utility bill payments such as electricity, water, gas, telephone and Direct-to-Home (DTH).
“We are brining a revolution in digital payment,” Sinha said listing various initiatives taken by the government to bring down the level of cash transactions in the country.
“When we have cash in circulation in economy, we create a drag. If we move to digital, we will remove these difficulties,” he added.