Issuers of prepaid cards and digital wallets can now access the National Electronic Fund Transfer and Real-Time Gross Settlement systems. Opening up the centralised payment systems for nonbanks, the RBI said that white-label ATM operators and card networks can also access the RTGS.
What this means is that these entities will now get separate Indian Financial System Codes and will get to open a current account with the central bank.
The move will bring down the cost of routing payments for non-banks. It will also reduce the risk of failure or delay in the execution of fund transfers as they no longer have to rely on banks.
The RBI said that direct access was being provided so that customers of non-banks do not face the risk of bank failure. “Banks have been providing the services to nonbanks for their payment and settlement needs. However, if the bank, which provides payment services to non-banks, is impacted, it can cause business disruption to the nonbanks also,” the RBI said.
It added that even if the disruption were to be temporary, it could cause and spread instability in the system.