RBI issues new rules to tightens digital payment security norms for lenders

• According to the RBI (2020), payments through digital modes are expected to jump to 1.5 billion transactions, worth Rs 15 trillion a day in five years.

• In this backdrop, directions aim to set up a robust governance structure and implement common minimum standards of security controls for digital payment products and services.

• Guidelines apply to Regulated Entities (REs) which include Scheduled Commercial Banks (excluding Regional Rural Banks), Small Finance Banks, Payments Banks; and Credit card issuing NBFCs.

Key guidelines include:

• Public awareness: REs should Inform public about types of threats, attacks and precautionary measures while using digital payment products.

• Mobile apps: Older application versions shall be deactivated in time-bound manner with release of newer version.

• Grievance redressal mechanism: REs should put in place systems for online dispute resolution for resolving disputes and grievances pertaining to digital payments.

• Mandatory consumer usage Guidelines: REs would incorporate secure, safe and responsible usage guidelines and training materials for end users within digital payment applications.

• Privacy: Mobile application should not store sensitive consumer authentication information such as user IDs, passwords, keys etc. on the device.

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Mains Paper 3: Economy

Prelims level: Regulated Entity guidelines

Mains level: Read the newsfeed

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