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RBI releases new rules for digital transactions in India

RBI releases new rules for digital transactions in India
RBI releases new rules for digital transactions in India
  • The circular is released amidst surging incidences of data breaches, frauds and outages in India’s proliferating payment ecosystem
  • The new rules specify conditions for regulating entities to establish partnerships and interact with mobile applications, third-party apps and payment gateways 

The Reserve Bank of India has reportedly issued extensive guidelines to bolster the digital payment infrastructure of the country. These regulations will also improve the control, compliance and security amongst banks, e-wallets, gateways and non-banking entities that are helping India achieve a cash-less economy.

These new rules are released during times of increased frauds, cyber breaches and outages in the country’s proliferating payments ecosystem. The new rules establish a structure helping regulated businesses in standardizing their security operations to implement best practices.

Small financial banks, scheduled commercial banks, NBFCs issuing credit cards and payment banks are expected to be compliant to these new regulations. These new norms also specify conditions for regulated entities to form partnerships and establish interactions with third-party apps and important ecosystem players like payment gateways and mobile applications.

The central bank apparently stated that the Master Direction offers necessary rules for setting up a vigorous governance structure and implementing minimal security standards for digital payment services and products. It further added that these rules are unbiased towards any platform or a technology, which will create an efficient user environment for performing secure digital payments.

Regulated entities are given a deadline of six months to set up compliance with these new rules. The master circular, a 21-page document, provides instructions for a wide range of applications, which includes protecting the source code of third-party UPI apps, safety guidelines for cyber-attacks, security protocols for internet banking and card payments.

RBI has reportedly stated that they give utmost importance to the security controls around the digital payments systems in the country. Shaktikanta Das, the Governor of RBI, first insinuated these rules during his address at the Monetary Policy Committee on December 4, 2020. He apparently expressed that such extensive instructions for payment ecosystems will look to bring a common minimum standard.

Source Credits:

https://economictimes.indiatimes.com/tech/tech-bytes/rbi-tightens-payments-security-norms-for-banks-fintech-apps/articleshow/81094514.cms

 

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