In a big push for digital payments, the Reserve Bank of India (RBI) has decided to make Real Time Gross Settlement (RTGS) payments 24X7 and increase the limit for contactless card payments to INR 5K from INR 2K.
“The RTGS system will soon be made 24/7 in the next few days and this was announced in the last policy. With this enablement, it is proposed to reduce settlement and default risks in the system by facilitating settlement on all days of the week, instead of five days earlier,” said Das.
In December 2019, the National Electronic Funds Transfer (NEFT) system was made available on a daily basis. Currently, RTGS is available for customers from 7.00 am to 6.00 pm on all working days of a week, except the second and fourth Saturdays of every month.
RTGS facilitates the transfer of a large amount of money from one bank account to another. As per the RBI’s FAQs, the minimum amount that can be remitted through RTGS is INR 2 lakh with no upper or maximum ceiling.
That apart, the central bank has also decided to increase the limit for contactless card transactions (without requiring to input a pin number) and recurring payment mandates through cards and unified payments interface (UPI) to INR 5K from INR 2K earlier. This will be effective from January 1, 2021 and will be at the discretion of the user.
Contactless card transactions and e-mandates on cards (and UPI) for recurring transactions have enhanced customer convenience in general while benefiting from increased use of technology, it further noted, adding that these are also well-suited to make payments in a safe and secure manner, especially during the current pandemic.
In July 2019, RBI waived off all customer-facing fees and charges on transactions through RTGS and NEFT systems.
RBI has also decided to increase the limit for contactless card transactions (without requiring to input a pin number) and recurring payment mandates through cards and unified payments interface (UPI) to INR 5K from INR 2K earlier. This will be effective from 1 January 2021 and will be at the discretion of the user.
Spike In UPI Transactions
UPI transactions have grown nearly 6.7% from 2.07 Bn in October to 2.21 Bn in November 2020. The payment system, owned by the National Payments Corporation of India (NPCI), processed transactions worth INR 3,90,999 Cr in November compared to INR 3,86,106 Cr in the previous month.
Earlier in October, the RBI said that digital payments have grown at a compounded annual growth rate (CAGR) of 55% from 593.61 Cr in FY2016 to 3,434.56 Cr in FY2020. During this period, its value has grown from INR 920.38 lakh Cr to INR 1,623.05 lakh Cr, translating into a CAGR of 15.2%.
Meanwhile, a Redseer report has revealed that digital payments will further grow about 2x and touch $60 Tn by 2022 as the Indian economy rebounds after the Covid-19 lockdown. “Driven by a continued rise in private expenditure, with retail consumption at the forefront, and a significant increase in digital maturity of the Indian customers,” the report reads.