1. Regulatory Updates
1.1. India
1.1.1. RBI allows for linking of pre-sanctioned credit lines with UPI technology
In furtherance to the statement on developmental and regulatory policies released on April 06, 2023, the Reserve Bank of India (“RBI”) makes the move of expanding the scope of the Unified Payment Interface (“UPI”) to enable transfer to/ from pre-sanctioned credit lines by Scheduled Commercial Banks. Currently, savings accounts, overdraft accounts, prepaid wallets, and credit cards can be linked with UPI technology. The present move relating to linking UPI facilities with credit lines shall involve obtaining consent from the individual customers by the concerned bank and putting in place a board-approved policy capturing the terms and conditions relating to its use. The terms shall include, among other items, credit limit, period of credit, rate of interest, etc. RBI
1.1.2. Monetary Penalties
No penalties by RBI this week.
1.2. Bangladesh
1.2.1. Bangladesh Bank instructs banks to refrain from financial transactions with sanctioned Myanmar banks
Bangladesh Bank (BB) has directed the commercial banks to abstain from engaging in financial transactions with Myanmar Foreign Trade Bank (MFTB) and Myanmar Investment Commercial Bank (MICB) as a precautionary measure in response to the sanctions imposed on these banks by the Office of Foreign Assets Control, financial intelligence and enforcement agency of the US Treasury Department. According to the US authorities, Myanmar's military government has utilised these banks to purchase arms and other goods from abroad. The Financial Express
2. Trends
2.1. India explores UPI and RuPay expansion globally
India is engaged in discussions with several South American and African nations to expand the usage of its UPI and RuPay cards as payment platforms in these regions. RBI and the National Payments Corporation of India (“NPCI”) are actively talking with various countries, high commissions and embassies. The international chief executive of NPCI recently stated that the number of countries adopting UPI is set to double within the next 12-18 (twelve to eighteen) months. LiveMint
2.2. RBI Governor unveils innovative payment solutions by NPCI at Global Fintech Fest 2023
RBI Governor Shri Shaktikanta Das introduced a range of payment products developed by NPCI at the Global Fintech Fest 2023. These innovative solutions include Credit Line on UPI, UPI LITE X, Tap & Pay, and Hello! UPI for conversational payments and BillPay Connect for conversational bill payments aim to promote an inclusive, resilient, and sustainable digital payments ecosystem. NPCI, a domestic organisation supported by the RBI and the Indian Banks' Association (IBA), is vital in facilitating retail payments and settlements in India through the RuPay gateway. CNBC
2.3. PSB alliance to streamline banking processes with digital certificates and e-auction portal
PSB Alliance, a private company supported by India's 12 (twelve) Public Sector Banks (“PSBs”) to enhance government initiatives, aims to introduce digital balance confirmation certificates and an e-auction platform for all PSBs by the end of the current fiscal year. Obtaining a balance confirmation certificate is a lengthy and manual process involving customers requesting the bank to provide a certificate to their auditor. Then, the auditor separately applies to the bank. PSB Alliance is streamlining and digitising this process using blockchain technology, allowing customers and auditors to access and manage everything through their application. Additionally, the company plans to launch an e-auction portal for all PSBs to auction mortgaged properties by January 2024. Financial Express
2.4. RBI Governor asks fintech sector players to form self-regulatory organisation
RBI Governor, Shri Shaktikanta Das, has asked fintech companies to establish a self-regulatory organisation (SRO) for the creation of a self-regulatory structure for fintech players to promote best industry practices, privacy and data protection norms in line with present legal standpoint and ethical business behaviour. It is anticipated that creating such a body shall prevent mis-selling and transparency in pricing, etc. RBI
3. Sector Overview
3.2. UPI transactions reached a value of INR 10 Billion (Indian Rupees Ten Billion) in August 2023: Business Standard
4. Business Updates
4.1. Razorpay ties up with NPCI to roll out UPI Autopay on QR for subscription-based business
Razorpay has launched the ‘UPI Autopay on QR’ in collaboration with the NPCI to help businesses increase their market reach by smoothly onboarding customers with a simple 2 (Two) step process taking place within just two seconds. This shall replace the existing 6 (Six) step journey in customer onboarding and do away with the requirement of downloading an app or signing up on the website. The Times of India
4.2. Hitachi Payment Services launches India’s first UPI-ATM
Hitachi Payment Services, a subsidiary of the Japanese company Hitachi, has introduced a UPI-Automated Teller Machine (“ATM”) known as the ‘Hitachi Money Spot UPI ATM’. This ATM operates as a ‘White Label ATM, ' meaning non-banking entities manage it in collaboration with the NPCI. This innovative ATM allows customers to withdraw cash from their bank accounts without needing a debit or credit card. Apart from non-banking entities, Payment Service Providers (PSPs) that have obtained certification and are equipped with Interoperable Cardless Cash Withdrawal (ICCW) functionality and issuer banks onboarded for this feature can also utilise this service. The Economic Times
4.3. Punjab National Bank integrates CBDC with UPI interoperability in its Digital Rupee application
Punjab National Bank (“PNB”) has announced the integration of India's Central Bank Digital Currency (“CBDC”) with UPI interoperability within its ‘Digital Rupee’ mobile application. With this move, PNB customers can now conveniently pay their vendors by scanning UPI QR codes using the PNB digital rupee app or using it for transactions at vendor outlets. Even users without a CBDC wallet in the PNB Digital Rupee App can make purchases using their CBDC wallets on the UPI QR codes of these merchants. This new feature is currently available for Android users on the Play Store and will soon be accessible to IOS users. The Economic Times
4.4. SBI to add CRM, AI layers to its YONO 2.0 app
During the Global FinTech Festival 2023, Dinesh Khara, the Chairman of SBI, revealed that more than 84 per cent (Eighty-Four per cent) of the bank's transactions have shifted to digital channels. He also mentioned that SBI is generating a fee income of over INR 100 crore (Indian Rupees One Hundred Crore only) on a quarterly basis from the services provided by YONO. The bank is currently working on implementing customer relationship management (CRM) and artificial intelligence (AI) layers to deliver the most suitable solutions to its customers through YONO 2.0. The Economic Times
Disclaimer
The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice. AK & Partners or its associates are not responsible for any action taken based on its contents.
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Mr Anuroop Omkar
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