Fintech, insurance companies may get direct access to CPS

Mumbai: The Reserve Bank of India (RBI) is considering the possibility of giving non-bank players, such as fintech and insurance companies, direct access to processing RTGS and NEFT transactions in line with global best practices.

Citing the examples of the banking regulators of England and Switzerland, the RBI said in its Financial Stability Report that an easing of access to Centralised Payments Systems (CPS) to nonbanks in India will reduce costs and make market access to funds easier.

“The Reserve Bank will examine the case for increased participation of non-banks in CPS,” the RBI said in the biannual report. “Internationally, central banks are expanding access to payment systems by enabling various types of non-banks to become members.”

Currently only standalone primary dealers, clearing corporations, central counterparties, retail payment system organizations, select financial institutions such as NABARD, Export-Import Bank of India (EXIM Bank) and Deposit Insurance and Credit Guarantee Corporation (DICGC) can access these systems.

Furthermore, the central bank also said that it is considering the possibility of introducing New Umbrella Entities (NUE) for retail payment systems to function along with the National Payments Corporation of India (NPCI).

Source: The Economic Times