RBI working on regulation to curb frauds in e-transactions

Jayant Sinha said 87% transaction happens in India in cash, which increases cost of handling besides inconvenience

The RBI is working to put in place a regulatory framework to address customer grievance and liability issues arising out of frauds in electronic transactions, Government said 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.

Read more from our special coverage on "RBI"

• RBI eases compliance reporting norms for banks
• RBI seeks to regulate P2P lending space
• RBI proposes to regulate peer-to-peer lending sector
• Central banks concept paper soon on social lending
• PSBs approach RBI for relaxation in provisioning

 

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 percent 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 government's committment 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 responsiblities of banks and customers in electronic transactions to minimise fruads, 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.