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RBI to set up a 24×7 digital payments helpline and issue guidelines on payments outsourcing

From September 2021 onward, the Reserve Bank of India (RBI) and payment companies will operate a 24×7 digital payments helpline service to address customer queries. The central bank also said that it will issue guidelines on outsourcing of payments services to bring standardisation to the practice within the payments industry.

With the pandemic inducing banking customers to adopt digital payments, lending and other fintech apps, in the past few months the central bank has been paying particular attention to consumer awareness, frauds and grievances. As more financial transactions take place online, the banking regulator is beefing up its supervisory efforts with the help of technology and recently constituted an expert group on digital lending or fintech lending. The RBI has also introduced a digital payments index to track adoption, and will soon issue guidelines on digital payment security controls, in addition to stepping up consumer awareness efforts via social media.

Digital payments helpline

“With enhanced penetration and efficiency of digital payments, major payment system operators would be required to facilitate setting-up of a centralised industry-wide 24×7 helpline for addressing customer queries in respect of various digital payment products and give information on available grievance redress mechanisms. Going forward, the facility of redress of customer grievances through the helpline shall be considered. This is envisaged to enhance consumer trust and confidence in the digital payments ecosystem,” RBI Governor Shaktikanta Das said on Friday, as part of the Monetary Policy Committee’s announcements.

The RBI hopes this initiative will build trust and confidence and will use technology to develop an automated system for answering queries and grievances. “The major payment system operators would be required to facilitate setting-up of a centralised industry-wide 24×7 helpline for addressing customer queries in respect of various digital payment products and give information on available grievance redress mechanisms by September 2021. Going forward, the facility of registering and resolving the customer complaints through the helpline shall be considered,” it said in the Statement on Developmental and Regulatory Policies.

Guidelines on outsourcing payments services

“The resilience of the of the digital payments ecosystem to operational risks needs to be constantly upgraded. A potential area of operational risk is associated with outsourcing by payment system operators (PSOs) and participants of authorised payment systems. To manage the attendant risks in outsourcing and ensure that a code of conduct is adhered to while outsourcing payment and settlement related services, the Reserve Bank shall issue guidelines on outsourcing of such services by these entities,” Das said.

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In the recent spate of predatory loan apps, many payment companies found that their systems had been compromised by fraudulent actors who were able to fool Know-Your-Customer checks conducted by payment system operators and aggregators. Since payment companies have multiple services, or full-stack product offerings, some activities are outsourced for efficiency and cost purposes. Therefore, specific guidelines would be required to safeguard vulnerabilities and cyber security risks through a form of code of conduct, the RBI said.

Integrated Ombudsman Scheme

The RBI currently has three Ombudsman schemesfor banks, non-banking finance companies and digital transactionsthat are operated through 22 offices across the country. It also created a complaint management system as an alternate dispute mechanism for customers whose’ complaints were not addressed by the regulated financial companies. Under the integrated scheme, customers of banks, NBFCs and prep-paid instrument users will be able to access one portal to register their complaints, it said.

“To make the Ombudsman mechanism simpler, efficient and more responsive, it has been decided to integrate the three Ombudsman schemes and introduce centralised processing of grievances following a ‘One Nation One Ombudsman’ approach. This is intended to make the process of redress of grievances easier by enabling the customers to register their complaints under the integrated scheme, with one centralised reference point,” Das said. The integrated scheme will be rolled out in June 2021, he said.

Expanding coverage of CTS Clearing

The  Cheque Truncation System (CTS), introduced in 2019, currently covers 150,000 branches and all legacy clearing houses across 3 processing grids in the country. However, 18,000 bank branches are still outside any formal system. The RBI will issue operational guidelines to bring all branches under the CTS clearing mechanism by September 2021.

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