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Economy
Mahesh

06/04/24 06:08 AM IST

RBI to enable UPI for cash deposit facility

In News
  • The Reserve Bank of India (RBI) has proposed to enable UPI for cash deposit facility. 
Significance
  • Cash Deposit Machines (CDMs) deployed by banks enhance customer convenience while reducing cash-handling load on bank branches.
  • The facility of cash deposit is presently available only through the use of debit cards.
  • The RBI has proposed to permit linking of PPIs through third-party UPI applications.
  • “This will enable the PPI holders to make UPI payments like bank account holders.
  • At present, UPI payments from bank accounts can be made by linking a bank account through the UPI App of the bank or using any third-party UPI application.
  • However, the same facility is not available for PPIs. PPIs can currently be used to make UPI transactions only by using the application provided by the PPI issuer.
  • The RBI to facilitating wider non-resident participation in Sovereign Green Bonds (SGrBs), decided to permit eligible foreign investors in the International Financial Services Centre (IFSC) to also invest in such bonds.
  • A scheme for investment and trading in SGrBs by eligible foreign investors in IFSC is being notified separately in consultation with the Government and the IFSC Authority.
  • At present, foreign portfolio investors (FPIs) registered with SEBI are permitted to invest in SGrBs under the different routes available for investment by FPIs in government securities.
  • The RBI has also decided to introduce a Mobile App of its RBI Retail Direct scheme which was rolled out in November 2021, giving access to individual investors to maintain gilt accounts with RBI and invest in government securities.
  • The Scheme enables investors to buy securities in primary auctions as well as buy/sell securities through the NDS-OM platform.
  • To further improve ease of access, a mobile application of the Retail Direct portal is being developed. The app will enable investors to buy and sell instruments on the go, at their convenience.
  • The central bank also decided for the distribution of Central Bank Digital Currencies (CBDCs) through Non-bank Payment System Operators.
  • To expand the avenues available to the Small Finance Banks for hedging interest rate risk in their balance sheet and commercial operations more effectively as well as to provide them with greater flexibility, the RBI has decided to allow them to deal in permissible rupee interest derivative products in terms of Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2019.
  • The current guidelines permit Small Finance Banks to use only Interest Rate Futures (IRFs) for the purpose of proprietary hedging.
  • The RBI also decided to review the Liquidity Coverage Ratio (LCR) framework.
Source- The Hindu

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