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AKP Banking & Finance Digest- March 28, 2022

Updated: Sep 22

Read in this week's update, a framework for geo-tagging of payment system touch points is released by RBI. RBI assigns lead bank responsibility for the newly created district in Meghalaya.

Highlights of the Week:
RBI releases Framework for Geo-Tagging of Payment System Touch Points
RBI assigns lead bank responsibility for newly created district in Meghalaya
Prudential treatment of Cat I, Cat II and VCF investments by commercial banks brought at par
RBI governor inaugurates the Reserve Bank Innovation Hub



1. RBI assigns lead bank responsibility for newly created district in Meghalaya

The Reserve Bank of India (RBI) has notified the assignment of Punjab National Bank as the lead bank for the newly formed district of Eastern West Khasi Hills erstwhile West Khasi Hills in Meghalaya. The district working code for the new district is 00U (to be read as ’zero-zero U‘), which has been allotted for the purpose of Basic Statistical Return (BSR) reporting by banks.[1]

2. Prudential treatment of Cat I, Cat II and VCF investments by commercial banks brought at par

RBI has notified an amendment to Master Direction for Classification, Valuation and Operation of Investment Portfolio of Commercial Banks, 2021 which outlines the prudential treatment for investment in Venture Capital Funds (VCFs). Following the review of feedback from banks, it was decided that investments in Category I and Category II alternative investment funds (AIFs) shall be subject to the same prudential treatment as investments in VCFs. Further, Section 4(a)(vii), 10(c)(ix), 12(ii)(b), 12(ii)(d)(ix), 13(iv)(b), 16(i), 16(ii), 18(ii)(e)(ii) and Annex II of the Directions have been amended.[2]


3. RBI governor inaugurates the Reserve Bank Innovation Hub

RBI has issued a press release announcing that Shri Shaktikanta Das, Governor, RBI has inaugurated the Reserve Bank Innovation Hub (RBIH) on March 24, 2022, in Bengaluru, Karnataka. The RBIH was established as a Section 8 company under the Companies Act, 2013, with an initial capital contribution of INR 100 crore, to promote and develop financial innovation in a long-term institutional setting.[3]


4. RBI held 594th Meeting of Central Board

RBI held the 594th meeting of the Central Board of Directors (Board) under the chairmanship of Shri Shaktikanta Das, Governor, RBI. The Board discussed RBI's areas of operation, the present economic situation, global and domestic issues, and the overall impact of current global geopolitical crisis during its meeting.[4]




5. RBI releases Framework for Geo-Tagging of Payment System Touch Points

RBI has notified the Framework for Geo-tagging of Payment System Touch Points (Notification) to facilitate the spread of payment acceptance infrastructure and inclusive access to digital payments. Merchants shall use geo-tagging to capture the geographical coordinates (latitude and longitude) of payment touch points they use to accept payments from clients. This Notification shall be applicable to banks and non-bank payment system operators (PSOs).

Infrastructure

Digital payment transactions carried out by customers using payment touch points use two broad categories of physical infrastructure:

  • Banking infrastructure; and

  • Payment acceptance infrastructure.

Geo-tagging guidelines

The following guidelines shall be applicable to geo-tagging to capture the locational data of acceptance infrastructure:

  • Banks / Non-bank PSOs shall capture and maintain geographical coordinates for all payment touch points; and

  • The following geotagging information shall be submitted to the RBI:

  • PoS terminals; and

  • Paper-based / Soft QR Codes.

Reporting guidelines

All banks and non-bank PSOs must keep a registry of all payment touch points across the country, which includes the following information which shall be submitted to RBI:

  • Merchant-related information;

  • Merchant location details;

  • Payment acceptance infrastructure details; and

  • Payment touch point location details.


Further, the reporting template has been attached in the appendix of the Notification.[5]


[1] RBI/2021-22/184 FIDD.CO.LBS.BC. No.18/02.08.001/2021-22, Reserve Bank of India, March 23, 2022

[2] RBI/2021-22/185 DOR.MRG.REC.96/21.04.141/2021-2, Reserve Bank of India, March 23, 2022 [3] Press Release: 2021-2022/1903, Reserve Bank of India, March 24, 2022 [4] Press Release: 2021-2022/1908, Reserve Bank of India, March 25, 2022

[5] RBI/2021-22/187CO.DPSS.OVRST.No. S1738/06-08-018/2021-2022, Reserve Bank of India, March 25, 2022

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