Payments made using electronic and online modes for purchasing goods and services should be settled within two days of completion of the transaction, the Reserve Bank of India said today.
All payments to merchants that did not involve transfer of funds to nodal banks should be effected within a maximum of T+2 settlement cycle. (T is defined as the day of intimation regarding the completion of transaction), RBI said in directions issued to banks tonight. It also said all payments to merchants involving nodal banks should be effected within a maximum of T+3 settlement cycle.
The central bank also said banks should convert the existing accounts used to collect payments for electronic transactions (payment) into internal accounts within three months. At present, the payments made by customers (for settlement of e-commerce/m-commerce/bill payment transactions), are credited to the accounts of intermediaries. These funds are then transferred to the accounts of the merchants in final settlement.
Any delay in the transfer of the funds by the intermediaries to the merchants’ account will entail risks to the customers and the merchants. It would also adversely impact the payment system, RBI said.
Funds maintained in these accounts would be treated as outside liability of the bank and the balances in these accounts taken into account for computing net demand and time liabilities of the bank. Banks shall subject these accounts to concurrent audit. They should also give a certificate every quarter to the effect that these accounts are operated in accordance with these directions.
All persons authorised to operate the payment system for issuing prepaid payment instruments and card schemes should comply with these directions, RBI has said.
