Money & Banking

Push e-mandate rules to June for smooth transition, say experts

Forum Gandhi Mumbai | Updated on March 30, 2021

The deadline for implementing the Payment Aggregators and Payment Gateways (PAPG) guidelines should be extended till June to enable smooth transaction, according to Aruna Sharma, member, RBI Digitisation Committee.

The Reserve Bank of India has imposed a March 31 deadline for banks to putin place a security measure called Additional Factor Authentication (AFA), which could disrupt services since banks are not ready fully.

“My fear is that the progress we have made so far will be eradicated. Going from the digital economy to the cash economy and then coming back to the digital economy will be extremely tedious,” said Sharma while speaking at a webinar organised by The Dialogue.

Industry body Internet And Mobile Association of India (IAMAI), too, had warned that millions of such transactions could fail as most big banks are yet to comply with the RBI’s new mandate. Its request was, however, turned down. Later, IAMAI had written a letter to Niti Aayog to present its case to the RBI.

Sharma, who has been a member of the digital committee for the past two years now, said it was important that there was a level-playing field for all financial players. “While the RBI’s regulations are not being questioned and nor are its intentions to protect the data of Indians, however, it was important that the players were heard and their issues addressed.”

She further argued that while the data protection was important, it was also important to make one umbrella law for data protection. Currently, there is the FTP, IT Act, Criminalisation under the IBC, along with RBI regulations, but all of this is overlapping and not on the same page. “Coordination, and consistency is imperative between all agencies, and authorities. This, along with the fact that, there needs to be one law which implements all these acts, and together is important.”

Avimukt Dar, Co-founder IndusLaw was of the opinion that “the RBI’s stance not to extend the e-mandate timeline is likely to derail the vision of Digital Bharat and significantly disrupt the services to the consumer. India’s journey towards emerging as a $5-trillion digital economy will be hit hard during the next couple of weeks, and consumers will again bear the brunt of micro regulatory approach of policymakers. This will impact the industry and cashless transactions, which has been a huge push by the current govt and is largely enabled by the digital payments industry.”

Published on March 30, 2021

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