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Economy
Pradeep Kumar

16/04/21 13:00 PM IST

Money transfer outside banking system signals

In news

The RBI last week proposed to enable, in a phased manner, payment system operators like mobile wallets regulated by the central bank to take direct membership in RTGS and NEFT.

Highlights
  • Transferring money to another person will soon be possible without depending directly on a bank.
  • Anyone will be able to send money online, or withdraw cash, using a mobile wallet or any non-bank entity through Real Time Gross settlement (RTGS) and the National Electronic Fund Transfer (NEFT), the centralised payment systems (CPSs) of the Reserve Bank of India.
  • This is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments. 
Implications
  • Use of UPI increased over the last 4-5 years since it was opened to third-party aggregators, opening the payment system to non-banks would increase digital payments and transactions significantly.
  • In a sense, it will prepare a digital trail of all individuals doing digital transactions on channels outside the banking system, which could help the overall financial system.
Source: Indian Express

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