Reserve Bank of India governor Shaktikanta Das on Thursday announced that the central bank will issue guidelines for a principle-based framework for authentication of digital payment transactions.
During the monetary policy committee briefing, the governor said that the bank has prioritised the security of digital payments, in particular the need for additional factor of authentication (AFA).
“Though RBI has not prescribed any particular AFA, the payments ecosystem has largely adopted SMS-based One Time Password (OTP). With innovations in technology, alternative authentication mechanisms have emerged in recent years. 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”. Instructions in this regard will be issued separately,” the governor added.
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During the briefing, governor Das said that the Aadhaar Enabled Payment System (APES) allows the customers to carry out digital payment transactions in assisted mode.
“In 2023, more than 37 crore users undertook AePS transactions, which points to the important role played by AePS in financial inclusion. To enhance the security of AePS transactions, it is proposed to streamline the onboarding process, including mandatory due diligence, for AePS touchpoint operators, to be followed by banks,” he said.
“Additional fraud risk management requirements will also be considered. Instructions in this regard shall be issued shortly,” the governor added.
The RBI decided to keep policy rate unchanged for the sixth time in a row as it maintains a tight vigil on inflation. The rate increase cycle was paused in April last year after six consecutive rate hikes aggregating to 250 basis points since May 2022.
Governor Shaktikanta Das said the Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5 per cent.