RBI Policy: How the key changes will make digital payment, money transfer easier

The Reserve Bank of India (RBI) in its Monetary Policy Committee (MPC) meeting on April 7, 2021 not only decided to keep the key policy rates unchanged, but also made some decisions to make online payments through NEFT, RTGS, mobile wallets, UPI and other digital modes more convenient.

So, to transfer money, you may not visit your bank branch or login to your Net Banking account as the RBI allows the National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) connectivity with non-bank payment system operators, facilitating UPI interoperability and broadening the digital payment landscape in India.

“The extension of NEFT and RTGS facilities to digital payments intermediaries is a pragmatic move in changing the fintech landscape of India and will be very beneficial for the customers. It will help in further penetration of digital payments as users from Tier 1, 2, 3, 4 cities will have curated services available on their fingertips which was earlier available only via banks. This will also offer them the convenience of using their favorite fintech apps to make NEFT/RTGS transactions with ease. Also, it will give rise to a smoother user experience since fintechs are more tech-driven and innovative than traditional banks. They are more likely to develop tailored products and services for their consumers. Overall, it will prove to be a transformative step that will help create a user-friendly ecosystem with wide-ranging innovations at the heart of it,” said Zafar Imam, CEO, Finshell.

Inclusion of non-bank players would also reduce the dependency on banks and make life easier for the customers.

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“Augmenting non-bank players by bringing RTGS and NEFT to their existing portfolios is a credible move that will help them drive more customer traction and recover from last year’s losses in the wake of COVID-19. Earlier, customers had to rely on banks for these services, but with this initiative, they can use it on other platforms as well. Not only will it help digital players ramp up sales and revenues, but it will also provide them with a new opportunity to transform customer experience and serve them more seamlessly. After the phenomenal success of UPI transactions, this is a welcome move to include more users across wider payment ranges,” said Ankur Maheshwari Chief Financial Officer, MoneyTap.