RBI MPC 2024: How Reserve Bank of India plans to secure digital payments using Aadhaar, and other key announcements
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) in its February review meeting unanimously decided to keep the policy repo rate unchanged at 6.5 per cent, thus maintaining the status quo for the sixth straight time. RBI Governor Shaktikanta Das announced that the central bank will issue guidelines for a principle-based framework for authentication of digital payment transactions.
He also said that the central bank has prioritised the security of digital payments, in particular the need for an additional factor of authentication (AFA).
The RBI's latest announcements aim to future-proof India's digital payment ecosystems against emerging risks. “Introducing Aadhaar-based authentication for credit card and UPI transactions shall mitigate fraudulent activities by enabling traceability. However, data privacy aspects need examination. For wider access, enhancing transaction limits for Prepaid Payment Instruments should spur adoption. Allowing Bharat Bill Pay units in Tier 3-6 centers can also accelerate financial inclusion," said Ashish Aggarwal, Director, Acube Ventures.
Digital rupee users will soon be able to execute transactions in areas with limited internet connectivity as the RBI on Thursday announced that offline capability will be introduced on the Central Bank digital currency (CBDC) pilot project.
«It is proposed to introduce an offline functionality in CBDC-R (Retail) for enabling transactions in areas with poor or limited internet connectivity,» Das said while announcing the bi-monthly monetary policy review.The CBDC Retail (CBDC-R) pilot currently enables Person to Person (P2P) and Person to Merchant (P2M) transactions using Digital Rupee wallets provided by pilot banks. “It is now
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