Sunday September 15, 2019
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RBI Extends the Deadline to Update KYC for PhonePe, Paytm

Industry body Payments Council of India hopes that the government would come up with a method that would enable mobile wallet users to avoid face-to-face verifications

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Paytm Logo. Wikimedia Commons

With the Reserve Bank of India (RBI) extending the deadline for mobile wallets to become fully Know Your Customer (KYC) compliant, people using PhonePe, Paytm, Amazon Pay or other such wallets will have no troudble doing their transactions as usual at least till February 29, 2020.

The deadline for mobile wallets to become full KYC compliant was earlier set to end on August 31. But on August 30 the RBI extended the deadline by six more months, with the warning that no further extension would be granted.

“It is advised that the timeline for conversion of minimum detail PPIs (pre-paid payment instruments) to KYC compliant PPIs has been extended from 18 months to 24 months. It may also be noted that no further extension will be granted for this purpose,” the RBI said in the notification to all PPI issuers or mobile wallet providers.

Reserve Bank of India. VOA

Becoming full KYC complinat would mean that the mobile wallet service providers would have to do a physical verification of their customers. Earlier, these PPI issuers made use of partial KYC, which could be completed through a smartphone.

Industry body Payments Council of India hopes that the government would come up with a method that would enable mobile wallet users to avoid face-to-face verifications.

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“PCI further states that the PPI industry hopes government will soon come up with the clarity on e-KYC via Aadhaar or any other remote fully non-face to face digital KYC method in order to enable the PPI industry players to perform this task of full KYC conversion effectively and efficiently under the given timelines as well as in a fast-track manner,” the Payments Council of India said in a statement earlier. (IANS)

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RBI Working With Regulators For Better Security Lending Products, Says DG

The Reserve Bank of India (RBI) is currently working with other financial sector regulators like Sebi, PFRDA and Irda to develop an interest rate market

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RBI, security, finance, market
This is broken as Rs 1,23,414 crore as surplus for year 2018-19 and another Rs 52,637 crore of excess provisions identified by the committee as per the revised Economic Capital Framework. Pixabay

The Reserve Bank of India (RBI) is currently working with other financial sector regulators like Sebi, PFRDA and Irda to develop an interest rate market where mutual funds, pension and insurance funds could participate in securities lending to deepen market based finance and develop an alternate to bank finance.

“IRDA, SEBI and PFRDA too could help development of interest rate markets. For instance, short selling activity could benefit if a wider pool of securities lenders can be developed.

“Insurance and pension funds, mutual funds have significant holdings of Government securities that could be used to lent to short sellers. This would avoid short-squeeze incident we saw a couple of years back, apart from generating income for these entities.

“We are working with regulators to develop a securities lending product that could enable these entities to participate in securities lending,” B.P. Kanungo, Deputy Governor, Reserve Bank of India recently said at FIMMDA meeting in Moscow.

RBI, finance, security, market
Reserve Bank of India’s regional office at South Gandhi Maidan Marg, Patna. Wikimedia Commons

FIMMDA is a representative body of participants in the fixed income market in India.

He said the Indian financial sector which mostly has been a bank-based one needs to develop a robust fixed income market to bring in market discipline, to augment bank finance and indeed free up bank finance for uses that cannot access the market directly.

Development of the fixed income market has been an important objective of the Reserve Bank, the Government, the SEBI and other regulators these many years. Significant progress has been made, yet a lot remains to be achieved.

The Banking regulator is also currently looking at refurbishing some regulations on treatment of cash margins as deposits, payment of interest on such margins, posting of collateral abroad to enable participants to move to global margining standards.

“The risk management at market level is pretty robust, with central counterparty settlement, exchange traded products, trade repositories, legal entity identifier.

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But there is scope of improvement at entity-level as far as financial institutions are concerned, which will be tested with introduction of new accounting standards. Some other aspects of regulation – treatment of cash margins as deposits, payment of interest on such margins, posting of collateral abroad – are all under examination to enable participants to move to global margining standards.

Kanungo further said in the next five years the demand for bonds will significantly outstrip the supply.

“It is estimated that five years down the line, the demand for bonds will significantly outstrip the supply,” he said. (IANS)