RBI plans intelligence platform to curb payment frauds, allows auto refill in UPI Lite

To curtail the increasing incidences of fraud, the Reserve Bank of India (RBI), in its developmental and regulatory policies announcements today, has allowed the formation of a committee led by A.P. Hota, former MD and CEO of NPCI, to recommend in two months a mechanism to set up a digital payments intelligence platform.

The RBI says the platform will harness advanced technologies to mitigate payment fraud risks. Several frauds occur by influencing unsuspecting victims to make the payment or share credentials. "Though the payment ecosystem (banks, NPCI, card networks, payment aggregators, and payment apps) take various measures on an ongoing basis to protect customers from such frauds, there is a need for network-level intelligence and real-time data sharing across payment systems," says the RBI.

Continuing the addition of features in the UPI ecosystem, the RBI has introduced an auto-replenishment of the UPI Lite wallet by bringing it within the ambit of the e-mandate framework. With this, a user's UPI Lite wallet will automatically load a certain amount if the balance goes below a threshold amount set. The UPI Lite facility currently allows a customer to load up to ₹2,000 and make payments up to ₹500 from the wallet. Also, as the funds remain with the customer, funds move from an account to a wallet, the requirement of additional authentication or pre-debit notification is proposed to be dispensed with, says the RBI.

The RBI has also announced the inclusion of recurring payments for FASTag, National Common Mobility Card (NCMC), etc., with an auto-replenishment facility under the e-mandate framework. "The automatic replenishment will be triggered when the balance in FASTag or NCMC falls below a threshold amount set by the customer," says the RBI.

The framework for processing e-mandate for recurring transactions, issued by RBI on January 10, 2020, currently enables recurring payments with fixed periodicity like daily, weekly, monthly, etc. Now, the central bank also wants to include replenishment of balances in FASTag, NCMC, etc., which are recurring in nature but without any fixed periodicity, into the e-mandate framework. "These categories of payments are made as and when needed and, therefore, their replenishment is not time specific or amount specific." Currently, an e-mandate framework requires a pre-debit notification of at least a 24-hour. The RBI has exempted this requirement in the case of FASTag, NCMC, etc.

In terms of regulations, the RBI has revised the limit of bulk deposits for scheduled commercial banks, excluding RRBs, small finance banks and local area banks. The banks have the discretion to offer differential rates of interest on the bulk deposits as per their requirements and asset-liability management (ALM) projections.

Before this, the bulk deposits limit was enhanced in 2019 as ‘single rupee term deposits of ₹2 crore and above’. On a review, the RBI has decided to revise it to ‘single rupee term deposits of ₹3 crore and above’ for SCBs (excluding RRBs) and SFBs. For local area banks, it's defined as 'single rupee term deposits of ₹1 crore and above’ as in the case of RRBs.