In his first monetary policy statement of 2024, RBI Governor Shaktikanta Das announced the following updates coming to fintech and payment systems: A new framework allowing banks to explore alternatives to SMS-based OTP for authentication: Tired of waiting for a one-time password (OTP) each time you use your debit or credit card online or try to do a a fund transfer? This might soon change with the central bank noting that alternative authentication mechanisms have emerged in recent years and to facilitate the adoption of these mechanisms, it will come out with a principle-based framework for authentication. Some of the more secure alternatives to SMS-based OTPs include time-based OTP, where apps like Google Authenticator generate a new OTP every thirty seconds on the paired device (generally your phone), fingerprint scanning, face scanning, etc. Offline use of digital rupee: The Central Bank Digital Currency (CBDC) or the digital rupee is the blockchain-based version of the rupee. It is currently being piloted across various cities in the country and is being used for person-to-person and person-to-merchant payment. Users can make payments using the digital rupee from a digital rupee wallet that is being provided by pilot banks. RBI is now proposing to allow digital rupee payments offline i.e. without the need for an internet connection. This will allow the digital rupee to be used in areas with poor or limited internet connectivity. Programmability of digital rupee: RBI is proposing to allow the programmability of digital rupee. "Programmability will permit users like, for instance,…
