RBI Proposes Linking Bank Credit Lines With UPI, Portal For Unclaimed Deposits

The Reserve Bank of India has proposed to link pre-sanctioned bank credit lines with the Unified Payments Interface to further expand the scope of real-time payments network.

"It is now proposed to expand the scope of UPI by permitting operation of pre-sanctioned credit lines at banks through the UPI. This initiative will further encourage innovation," RBI Governor Shaktikanta Das said after the monetary policy committee meeting on Thursday. The move follows the June 2022 decision to link Rupay credit cards with UPI.

UPI's robustness has also been leveraged to develop new products and features from time to time, Das said in his statement.

Das also announced a other measures aimed at deepening India's domestic foreign exchange market, make processes easier for depositors, streamline regulatory approvals, and strengthen grievance redressal mechanisms at credit bureaus.

The RBI has proposed to allow banks with international banking units to offer non-deliverable foreign exchange derivative contracts involving the Indian rupee to resident users in the onshore market, Das said.

"This measure will further deepen the forex market in India and provide enhanced flexibility to residents in meeting their hedging requirements," he said. Earlier, banks with IFSC banking units or IBUs were permitted to transact in such derivatives with only non-residents and other eligible banks having such units.

Non-deliverable forwards are a type of foreign exchange derivatives that allow users to lock in an exchange rate for a specified period of time, much like regular forwards contracts. But instead of delivering the exact currency amount at the end of the contract, the difference between the NDF rate and the fixing rate is settled in cash between parties to the trade.

To simplify and streamline processes of seeking licences and approvals from the RBI, the regulator has decided to have a web-based centralised portal.

"The portal will show time limits for deciding on the applications or approvals sought," Das said. "This measure will bring greater efficiency into regulatory processes."

"At present, the depositors or beneficiaries of unclaimed bank deposits of 10 years or more have to go through the websites of multiple banks to locate such deposits," Das said.

It has been decided to develop a web portal to enable searching for such deposits across banks, Das said. The search results will be enhanced by use of certain AI tools, the RBI said in the statement.

The RBI has also proposed a set of measures to strengthen the grievance redressal mechanisms at credit information companies or credit bureaus.

These include:

• Compensation mechanism for delayed updation/rectification of credit information reports.

• Provision for SMS/email alerts to customers whenever their credit information reports are accessed.

• A timeframe for inclusion of data received by CICs from credit institutions.

• Disclosures on customer complaints received by CICs.

"These measures will further enhance consumer protection," Das said.