 "RBI, Reserve Bank of India")
The Reserve Bank of India (RBI) has proposed to set up a Digital Payments Intelligence Platform to mitigate payment frauds and protect customers from associated risks.
The banking regulator has constituted a committee to examine aspects of the digital public infrastructure for the intelligence platform.
The committee is expected to give its recommendations within two months, the RBI said.
A.P. Hota, former managing director (MD) and chief executive officer (CEO), National Payments Corporation of India (NPCI), is the chairman of the committee.
“The payment ecosystem (banks, NPCI, card networks, payment aggregators, and payment apps) takes various measures on an ongoing basis to protect customers from such frauds. But there is a need for network-level intelligence and real-time data sharing across payment systems,” the RBI said in a statement.
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The proposal to create a digital payments intelligence platform comes as the number of payment frauds have shot up.
The number of frauds in the banking sector increased over four times in the past five years to 36,075.
In terms of the number of frauds, these have predominantly been witnessed through digital payments (card or internet). That number rose to 29,082 in FY24 as compared to 2,677 in FY20, data from RBI’s annual report shows.
“Efforts to create an industry-wide database have so far been mired by legal and commercial issues related to sharing of personal information of fraudsters. We hope that with the RBI stepping in, it will become possible to create such a database through which repeat offenders can be stopped,” said Wriju Ray, chief business officer, IDfy; an identity verification tech firm.
Recurring payments: Fastags, NCMC, UPI Lite
The RBI has announced the inclusion of auto replenishment facility for Fastag, National Common Mobility Card (NCMC), and Unified Payments Interface (UPI) Lite wallets, under the e-mandate framework.
The facility to automatically replenish balances in these instruments will be triggered when the balance in Fastags, NCMCs or UPI Lite wallet falls below a threshold amount set by the customer.
The current e-mandate framework requires a pre-debit notification of at least 24 hours before the actual debit from a customer’s account.
The RBI has proposed to exempt this requirement for payments made from customer’s account to auto-replenish balances in Fastags and NCMCs, among others.
Similarly, the requirement of additional authentication or pre-debit notification for UPI Lite wallet is proposed to be exempted since the transferred funds remain with the customer.
“Integrating UPI Lite with the e-mandate framework will benefit people in Tier II-III towns and rural regions, who frequently rely on small-value payments for daily needs,” said Anand Kumar Bajaj, Founder, MD & CEO, PayNearby; a fintech firm.
UPI Lite is an on-device wallet where users can make payments of up to Rs 500 without the use of a UPI PIN.
It enables low-value transactions without utilising a remitter bank’s core banking systems in real time.
