RBI introduces framework for digital transaction authentication

Das highlighted that RBI has not prescribed any particular Additional Factor of Authentication (AFA) but the payments ecosystem has largely adopted SMS-based One Time Password (OTP).

The Reserve Bank of India (RBI) on February 8 introduced a framework for authentication of digital payment transactions.

“To facilitate the use of such mechanisms for digital security, it is proposed to adopt a principle-based framework for authentication of digital payment transactions,” RBI Governor Shaktikanta Das said at the Monetary Policy Committee announcement.

Also read: RBI Interest Rates: MPC keeps repo, stance unchanged as inflation concerns weigh

Das highlighted that the RBI has not prescribed any particular Additional Factor of Authentication (AFA) but the payments ecosystem has largely adopted SMS-based One-Time Password (OTP).

He said that instructions for the framework will be issued separately.

Additionally, the central bank extended the requirements of key fact statements to all retail and medium small and micro enterprises (MSME) loans, Governor Das said.

Also read: Financial parameters of NBFCs improving, says governor at RBI MPC review

“RBI mandated certain categories of lenders to provide borrowers with key fact statements which provide details of all transactions fees, interest. Requirement of key fact statements extended to cover all retail and MSME loans,” said Das.

Das said that this measure will lead to enhanced transparency and will enable customers to make enhanced operations. “Circular will be released separately as banks will need time to make preparations,” Das said.

MPC decision

The Reserve Bank of India’s Monetary Policy Committee has decided to keep the policy repo rate unchanged at 6.5%.

The six-member monetary policy committee voted by 5:1 majority to keep the repo rate unchanged at 6.50 per cent in its last meeting of FY24 as retail inflation continues to be above its target of 4 per cent.

The MPC also decided by a majority of five out of six members to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target while supporting growth.