New Norms For Digital Payments Processors: RBI Wants Them To Improve Security And Compliance!

Must Read

How To Leverage On Cold Calling to Help You Win Big In 2021

Cold calling is an old-fashioned sales strategy that involves sales representatives reaching out to prospective customers who have not...

Price of Google Pixel 6 Leaked: The Jaw-Dropping Price Tag Could Change The Game

The price of Pixel 6 could start from $599. The much-awaited Google Pixel 6 is expected to get price...

With Free Delivery and Zero Surge Pricing, What’s Swiggy Upto?

Be it fancy, hearty meals delivered at door-step or being the savior of late-night food cravings - Swiggy has...

In a bid to improve governance, India’s central bank has decided to tighten the norms around security and compliance for banks and fintech companies.

Aiming to help improve on factors such as security, control and compliance, the Reserve Bank of India, aka RBI, recently released a set of detailed guidelines for wallet operators, payment gateways, banks and other non-banking entities who run payments operation within the country borders.

The introduction of these guidelines was first hinted at by the RBI Governor Shaktikanta Das in his Monetary Policy Committee address previous year on December 4th. This new set of rules comes at a time when frauds, outages and several instances of data breaches has been observed to have spiked in the country’s payment ecosystem.


RBI’s newly minted framework dubbed as the ‘Master Direction’ is basically a set of all best practices as recommended by the central bank and will help standardardise the security operations of all regulated payment processing entities.

Issued on Thursday, the RBI circular announcing the same mentioned that the Master Direction provides necessary guidelines in order to implement and set up a robust governance structure along with deploying common minimum standards of security controls for various digital payments’ products and services.

Furthermore, the circular also said that the guidelines are completely technology and platform agnostic and therefore will create an ‘enhanced and enabling environment’ for customers to use digital payments in a safer and more secure way.

RBI has granted six months to all regulated payment processing entities to ensure compliance. The 21-page Master Direction circular issued specifications for – source code protection of third-party UPI apps, guidelines related to cybersecurity to prevent external attacks & card payments and internet banking security protocols.

The central bank also mentioned that necessary guidelines will be issued separately and hightest importance will be given to security controls around the digital payment systems in India.


Now, note here that these newly formulated rules will also have implications on third-part payment apps such as WhatsApp Pay, Google Pay, PhonePe, etc besides regulated bank on how they interact with their partnered banks and store customer data.  What more?

Well, it is bound to affect the business models of several payment gateways as well who are reliant on the delayed settlement of merchant funds to the banks of their users. According to the RBI’s new rules, a payment operator or a bank cannot delay settlements for their customers’ bank accounts by more than 24 hours maximum.

The RBI in the circular mentioned that the Board and Senior Management will be held responsible for the implementation of this policy and that the policy itself will be reviewed at least on a yearly basis mandatorily. 

It now remains to be seen how does Indian payment processing entities react to it and if these norms by the RBI will be able to successfully accomplish its primary goal of improving security and compliance in the country’s digital payments space. We will keep you updated on all future developments. Until then, stay tuned.


Please enter your comment!
Please enter your name here

Latest News

Future Retail Can’t Sell Its Assets To Reliance Retail: Singapore Tribunal

In a double victory for Amazon, the Singapore International Arbitration Centre (SIAC) has denied Future Retail's appeal to lift the temporary suspension...

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded and unparalleled...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter, with a...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one of the...

More Articles Like This