Thursday 30 June 2022
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Banks can’t be ready with digital infra by 1 Jan 2017

New Delhi: An advisory letter the Reserve Bank of India (RBI) sent yesterday to all banks in the country suggests that the extent of work needed to gear up the banking sector for a digital economy may not be ready before half of the next year is gone. The RBI has written to the banks that they must await its further advice on the deadline for making their card-processing infrastructure -enabled.

The 3 workable points that Nanda S Dave, chief general manager in charge of the Department of Payment and Settlement Systems, central office in the RBI, has written in typical bureaucratese imply, first, that all the banks had been told that they must be ready with the needed to process transactions using  card-based biometric authentication by 1 January 2017. Dave has reminded the bankers that this circular (DPSS.CO.PD.No.892/02.14.003/2016-17) had been issued on 29 September.

Second, the RBI has noted that the banks have been slow in installing the necessary equipment “owing to the mismatch between demand and supply of such -enabled devices”. The central bank has, therefore, decided that it would allow all banks affiliated to it to make all the requisite arrangements, especially “deployment of Aadhaar-enabled devices”, by 30 June of the next year.

In the meantime, the RBI says, “… banks may continue to make necessary arrangements, including changes as host-end, network level and device readiness, as required to ensure adherence to above instructions.”

Third, the central bank has clarified that the aforementioned circular was meant for installation of the new card-processing  alone. That circular, it has said, did not order the banks to prepare the existing card-processing infrastructure for -based biometric authentication. The RBI has said it will tell the banks when to do it some day in the future (date not specified in the letter).

The letter (RBI/2016-17/170/ DPSS.CO.PD No.1421/02.14.003/2016-17) is a “directive” “issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007 (Act 51 of 2007)”. It was addressed to the chairman and managing director, chief executive officers, all scheduled commercial banks including regional rural banks, urban cooperative banks,  cooperative banks, district central cooperative banks, authorised card payment networks, white label ATM operators, payments banks and small finance banks.

The thumbnail image generated for social media by this  is an Associated Press photo

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