Central Bank Implements Strict Authentication Measures
The central bank is implementing strict authentication measures to facilitate customers in conducting their business activities online without concerns of fraud. The use of enhanced technologies such as biometric authentication aims to improve user experience.
New Regulations for Electronic Payment Systems (ETP)
The central bank has announced a review of regulatory frameworks for Electronic Payment Systems (ETP) and intends to solicit stakeholders’ opinions on the matter. The bank had previously established regulatory frameworks for this sector in 2018. Additionally, there is a proposal to enhance the Aadhaar-enabled Payment System (AePS) in order to increase its resilience. This initiative plays a crucial role in financial inclusion, enabling customers to make payment transactions through service providers.
The central bank has announced the introduction of programming and offline functionalities in the Central Bank Digital Currency (CBDC) pilot program. This is a step towards improving the functionality and usability of CBDC. Current CBDC pilots primarily focus on basic payment functions, limiting their applicability. Transactions often require internet access, making it challenging to use in areas with poor network coverage. Additionally, CBDC currently cannot be programmed for specific purposes, limiting their flexibility. Offline functionality ensures convenient payments, enabling smooth transactions even without internet access.
The Future of Digital Payments in India
Gaurav Goel, founder and director of Fynocrat Technologies, believes that CBDC is the future of India. Introducing a state-backed digital currency such as e-rupee has the potential to elevate India’s digital payment landscape to new heights. CBDC systems, based on blockchain technology, offer cost-effective alternatives for managing and distributing physical money, with low transaction costs and the ability to transact in real-time 24/7.
Secure Future Payments
RBI’s regulatory frameworks ensure a secure future for digital payments. The central bank proposes streamlining the onboarding process for AePS service providers. Existing regulatory frameworks for e-commerce platforms were introduced in 2018. The introduced pilot CBDC Retail system currently enables Person-to-Person (P2P) and Person-to-Merchant (P2M) transactions.