MPC Meet: From RuPay prepaid forex card to expanding e-RUPI scope, here are measures announced by RBI

Apart from announcing its decisions on repo rate, and commenting on GDP and inflation forecasts, the Reserve Bank of India (RBI) today announced a series of additional measures ranging from the issuance of RuPay prepaid forex cards to expanding the scope and reach of e-RUPI vouchers.

After the MPC's second bi-monthly meeting of FY23 ended today, the central bank said it has internationalised issuance and acceptance of RuPay debit and credit cards considering their increasing acceptance abroad. The RBI will now permit the issuance of RuPay prepaid forex cards by banks, which will expand the payment options for Indians travelling abroad. "Further, RuPay cards will be enabled for issuance in foreign jurisdictions. These measures will expand the reach and acceptance of RuPay cards globally."

The central bank has also made efforts to streamline the Bharat Bill Payment System (BBPS) processes and membership criteria to enhance its efficiency and encourage greater participation. "It is proposed to streamline the process flow of transactions and membership criteria for operating units."

It also expanded the scope and reach of e-RUPI vouchers by permitting non-bank prepaid payment instruments (PPI) issuers to issue e-RUPI vouchers; enabling the issuance of e-RUPI vouchers on behalf of individuals; and simplifying the process of issuance, redemption, etc. At present, purpose-specific e-RUPI digital vouchers are issued by banks. The current measures will make the benefits of e-RUPI digital vouchers accessible to a wider set of users and further deepen the penetration of digital payments in the country.

According to the central bank, scheduled commercial banks can now set their own limits for borrowing in call and notice money markets in the prescribed prudential limits for inter-bank liabilities. This will provide greater flexibility for managing liquidity.

To widening of the scope of the framework for the resolution of stressed assets, the central bank has proposed to issue comprehensive guidelines on compromise settlements and technical write-offs, which will now be applicable to all regulated entities including cooperative banks, it said. It has also been proposed to rationalise the extant prudential norms on a restructuring of borrower accounts affected by natural calamities.

The RBI has also decided to issue guidelines on default loss guarantee arrangements in digital lending to facilitate the orderly development of the digital lending ecosystem and enhance credit penetration in the economy.

The Reserve Bank has also decided to extend the timelines for achieving the priority sector lending targets for Urban Co-operative Banks (UCBs) by two more years up to March 2026. Further, UCBs, which have met the targets as on March 31, 2023, will be suitably incentivised, it said. "While a number of UCBs have met the required milestones as of March 2023, a need has arisen to ease the implementation challenges faced by other UCBs," the RBI said.

Further, the central bank has decided to rationalise and simplify the licensing framework for authorised persons to improve the efficiency in the delivery of foreign exchange facilities to various segments of users, including common persons, tourists, and businesses. It was last reviewed in March 2006. The decision, says the apex bank, has been taken keeping in view the developments, including progressive liberalisation under FEMA, over the last several years and to effectively meet the emerging requirements of the rapidly growing Indian economy.