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Norm for new banks in joining payment systems

The Reserve Bank of India has said entities, which had been given in-principle approval for setting up payments banks and small finance banks, can join a payment system only after getting the final licence. RBI said in a release that these entities can apply to the RBI for membership of any centralized/ decentralized payment systems, including Bharat Bill Payment System, after receiving the licence for commencement of business under the Banking Regulation Act, 1949. The ‘in-principle’ approval is valid for 18 months and within this timeframe the applicants would have to take steps to get the license for operating as banks by complying with the requirements set by the RBI

Meanwhile, the regulator has said it is proposing to set up ‘Payment System Innovation Awards’ to encourage innovators in payment and settlement system. It said various areas of innovation would be examined and awards would be announced. The areas include fraud prevention, customer convenience, cost reduction and use of emerging technologies for payments. The Institute for Development and Research in Banking Technology (IDRBT) would organize the contests for the awards.

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