[Highlights] of RBI’s Developmental and Regulatory Policies for the Financial Market

Table of Contents

Introduction

1. RBI to put in place regulatory framework for permitting default loss guarantee arrangements in digital lending

2. RBI to notify a comprehensive regulatory framework for stressed assets

3. Bank to be allowed to set their own limits for Borrowing in call and notice Money Markets

4. Expansion planned for the scope and coverage of e-RUPI vouchers

5. RBI to streamline the Bharat Bill Payment System processes and membership criteria

6. Enhancing the global reach and acceptance of RuPay Cards

Introduction

RBI vide. Press Release no. 2023-2024/ 365 dated June 8, 2023, has introduced a Statement on various developmental and regulatory policies relating to

(i) Financial Markets;

(ii) Regulation;

(iii) Payment Systems.

The proposal aims to promote stability and sustainability in the financial ecosystem. The key proposals as laid down in the Statement on Developmental and Regulatory Policies are discussed in detail hereunder:

1. RBI to put in place regulatory framework for permitting default loss guarantee arrangements in digital lending

The RBI has released the Statement on Developmental and Regulatory Policies. Now, it has been decided to put in place a regulatory framework for permitting  default loss guarantee arrangements in digital lending. Detailed guidelines on the matter will be issued separately.

2. RBI to notify a comprehensive regulatory framework for stressed assets

With a view to widen the scope of prudential framework for stressed assets, RBI has proposed to issue a comprehensive regulatory framework governing compromise settlements & technical write-off.

3. Bank to be allowed to set their own limits for Borrowing in call and notice Money Markets

With a view to providing greater flexibility for managing the money market borrowings, it has been decided that SCBs can set their own limits for borrowing in Call and Notice Money Markets within the prudential limits for inter-bank liabilities prescribed by the Reserve Bank of India.

4. Expansion planned for the scope and coverage of e-RUPI vouchers

Keeping in view the benefits for users and beneficiaries alike, RBI has proposed to expand the scope and reach of e-RUPI vouchers by permitting non-bank Prepaid Payment Instrument (PPI) issuers to issue e-RUPI vouchers and enabling issuance of e-RUPI vouchers on behalf of individuals.

5. RBI to streamline the Bharat Bill Payment System processes and membership criteria

To enhance efficiency of the system and also to encourage greater participation, the process flow of transactions and membership criteria for onboarding operating units in Bharat Bill Payment System (BBPS) will be streamlined.

6. Enhancing the global reach and acceptance of RuPay Cards

In order to expand payment options for Indians travelling abroad, it has been decided to allow issuance of RuPay Prepaid Forex cards by banks in India for use at ATMs, PoS machines and online merchants overseas.