RBI has taken a number of pro-active steps to support Fintech ecosystem and lay down a regulatory framework
FinTech BizNews Service
Mumbai, December 8, 2023: Reserve Bank of India announced on Friday its plan to come out with a unified regulatory framework on connected lending for all regulated entities (REs). RBI has also decided to lay down a regulatory framework for web-aggregation of loan products.
The extant guidelines on connected lending are limited in scope. It has been decided to come out with a unified regulatory framework on connected lending for all regulated entities (REs) of the Reserve Bank. This will further strengthen the pricing and management of credit by regulated entities.
Regulatory Framework for Web-Aggregation of Loan Products
The Reserve Bank had introduced the regulatory framework for digital lending in August/September 2022. The digital lending ecosystem also comprises of services that aggregate loan offers from lenders (called web-aggregation of loan products) for guidance of customers. Several concerns relating to such web-aggregation of loan products harming consumers’ interest have come to our notice. It has, therefore, been decided to lay down a regulatory framework for web-aggregation of loan products. This is expected to result in enhanced customer centricity and transparency in digital lending.
Setting up of Fintech Repository
Financial entities like banks and NBFCs in India are increasingly partnering with Fintechs. For better understanding of developments in the Fintech ecosystem and to support this sector, it is proposed to set-up a Fintech Repository. This will be operationalised by the Reserve Bank Innovation Hub in April 2024 or earlier. FinTechs would be encouraged to provide relevant information voluntarily to this Repository.
Enhancing UPI Transaction Limit for Specified Categories
The limit for various categories of UPI transactions has been reviewed from time to time. It is now proposed to enhance the UPI transaction limit for payment to hospitals and educational institutions from Rs1 lakh to Rs5 lakh per transaction. This will help the consumers to make UPI payments of higher amounts for education and healthcare purposes. 9 e-Mandates for recurring online transactions – Enhancement of limit for specified categories 32. e-Mandates for making payments of recurring nature have become popular among customers. Under this framework, an additional factor of authentication (AFA) is currently required for recurring transactions exceeding Rs15,000. It is now proposed to enhance this limit to Rs1 lakh per transaction for recurring payments of mutual fund subscriptions, insurance premium subscriptions and credit card repayments. This measure will further accelerate the usage of e-mandates.
Establishment of Cloud Facility for the Financial Sector in India
Banks and financial entities are maintaining an ever-increasing volume of data. Many of them are utilising the cloud facilities for this purpose. The Reserve Bank is working on establishing a cloud facility for the financial sector in India for this purpose. Such facility would enhance data security, integrity and privacy. It would also facilitate better scalability and business continuity. The cloud facility is intended to be rolled out in a calibrated fashion over the medium term.
