The Reserve Bank of India has proposed to enable regulated payment system operators to take direct membership in Central Payment Systems such as RTGS and NEFT.

“It is now proposed to enable non-bank payment system operators such as Prepaid Payment Instrument (PPI) issuers, card networks, White label ATM operators and Trade Receivables Discounting System (TReDS) platforms regulated by the Reserve Bank, to take direct membership in CPSs,” said RBI Governor Shaktikanta Das on Wednesday.

This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments, he further said.

At present, membership to the RBI-operated Centralised Payment Systems –RTGS and NEFT – is currently limited to banks, with just a few exceptions such as specialised entities such as clearing corporations and select development financial institutions.

The Statement on Development and Regulatory Policies noted that over the last few years, the role of non-bank entities in the payment space has grown in importance and volume, as they have innovated by leveraging technology and offering customised solutions to users. The proposal is expected to reinforce this trend and encourage participation of non-banks across payment systems.

“These entities will, however, not be eligible for any liquidity facility from the Reserve Bank to facilitate settlement of their transactions in these CPSs,” said the RBI, adding that necessary instructions will be issued separately.

Meanwhile, to measure the extent of financial inclusion in the country, the RBI will construct and periodically publish a Financial Inclusion Index (FI Index). “The FI Index will be based on multiple parameters and shall reflect the broadening and deepening of financial inclusion in the country,” it said, adding that to begin with the FI Index will be published annually in July for the financial year ending previous March.

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