The Reserve Bank of India (RBI) has sought a legislation from the government of India on making transactions made on electronic payment channels irreversible and insolvency-neutral. That would mean that even if a financial institution went bankrupt, the e-transaction would have to be honoured.
This comes in wake of the fact that currently, there is no legal framework encompassing transactions conducted on electronic payment channels like the electronic clearing system (ECS), electronic funds transfer (EFT), and the real time gross settlement system (RTGS). The apex bank has also sought irreversibility of the transactions.
Mr Gupta was addressing bankers at a Cyber Security for Financial Services seminar organised jointly by the technology arm of the RBI, the IDRBT (Institute of Development and Research in Banking Technology) and the Confederation of Indian Industry (CII) in Mumbai. He said that the RBI was planning to divest the settlement functions for these payment channels to a new institution to be set-up jointly with the banking community.
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