5 Additional Developmental And Regulatory Policy Measures RBI Announced

In the monetary policy statement released by the Reserve Bank of India today on Thursday, April 6,2023, it has announced additional measures. The statement sets out various developmental and regulatory policy measures relating to financial markets, regulation and supervision, and payment and settlement systems. The detailed instructions regarding each will be issued separately.

RBI intends to develop Onshore Non-deliverable Derivatives Market

Banks in India which operate International Financial Services Centre (IFSC) Banking Units (IBUs) were permitted to transact in INR Non-deliverable foreign exchange derivative contracts (NDDCs) with non-residents and with each other effective from June 1, 2020.

RBI has decided to permit banks with IBUs to offer INR NDDCs to resident users in the onshore market. These banks will have the flexibility of settling their NDDC transactions with non-residents and with each other in foreign currency or in INR while transactions with residents will be mandatorily settled in INR. Related directions will be issued separately.

Setting up of 'PRAVAAH' (Platform for Regulatory Application, Validation And AutHorisation)

Currently the application process for various entities to obtain a license or authorization to carry out activities regulated by RBI, along with periodic approvals is through on-line and off-line modes. In order to simplify the process and reduce the cost of compliance RBI decided to develop a secured web based centralised portal named as 'PRAVAAH' (Platform for Regulatory Application, Validation And AutHorisation) which will gradually extend to all types of applications made to RBI across all functions.

Development of Web portal for unclaimed deposits

The deposits remaining unclaimed for 10 years in a bank are transferred to the "Depositor Education and Awareness" (DEA) Fund maintained by the Reserve Bank of India. In order to improve and widen the access of depositors / beneficiaries to such data, RBI has decided to develop a web portal to enable search across multiple banks for possible unclaimed deposits based on user inputs. The search results will be enhanced by use of certain AI tools.

Grievance Redress Mechanism relating to Credit Information Reporting

With the increase in customer complaints regarding credit information reporting and the functioning of credit information companies (CICs), RBI has decided to put in place a comprehensive framework for strengthening and improving the efficacy of the grievance redress mechanism and customer service provided by the credit institutions (CIs) and CICs. For this purpose, the CICs have been brought under the aegis of the Reserve Bank Integrated Ombudsman Scheme (RB-IOS).

In addition, it is also proposed to put in place the following measures: a compensation mechanism for delayed updation/rectification of credit information; a provision for SMS/ email alerts to customers when their credit information are accessed from CICs; a timeframe for ingestion of data received by CICs from Credit Institutions; and disclosures relating to number and nature of customer complaints received on the website of CICs.

Operation of Pre-Sanctioned Credit Lines at Banks through the UPI

At present, UPI transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets. It is now proposed to expand the scope of UPI by enabling transfer to / from pre-sanctioned credit lines at banks, in addition to deposit accounts. In other words, UPI network will facilitate payments financed by credit from banks. This can reduce the cost of such offerings and help in development of unique products for Indian markets.