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RBI allows non-banks to have access to payment systems

The Reserve Bank of India has announced that it is allowing authorized non-bank Payment System Providers (PSPS) like PPI issuers, card networks and white label ATM operators to participate in Centralized Payments Systems as direct members. RBI said this is following a review of the extant arrangements and after detailed discussions with PSPs. This will mean these entities will be able to participate in Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) systems. It will also help these entities to save costs as at present they have to route payments through banks. The risk of failure or delay in execution of fund transfers can be eliminated if the transactions are directly initiated by non-banks. The direct access to CPS can also enable them to leverage technology to offer customized choices to consumers. Direct access can provide level playing field, minimizing the need to use intermediaries. As the settlement is carried out in central bank money, it greatly reduces the uncertainty in finality of the payments and settlement risk

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