Almost all citizens of this country have shifted online. It made transactions among people residing in remote areas easier. Many are opting for cashless India. Though digital transactions have become easy, they also brought new problems with them. With the increased usage of digital platforms, cases of banking fraud are also growing and banks are continuously adopting various measures to prevent these issues.
The Reserve Bank of India is taking selective steps concerning banking and digital fraud. It had issued draft guidelines on these proposals and invited public feedback for the same.
RBI’s New Digital Measures
The draft guidelines of the RBI had proposed to use the Aadhaar-Enabled Payment System for vendors. This would mean that an SMS-based OTP system could become imperative with digital transactions.
Another draft is to include two-factor authentication for online transactions. The RBI and other banks have instructed the NPCI to implement this.
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RBI’s E-Mandate and KYC
It has also said that in case no digital transaction has been done with the vendor during the last six months, mandate will require the bank to redo KYC. Third, to make transactions more convenient and easier, the RBI has introduced e-mandates for insurance premiums, mutual funds, credit card payments up to ₹1 lakh, and other recurring transactions up to ₹15,000.
NPCI has clarified that it will ensure that only one bank implements AePS. Banks and NPCI have three months to comply with such guidelines. The RBI has also invited public comments on such proposals till August 31.
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