RBI introducing new payment products
Team Ambitiousbaba and AB are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today's Current Affairs topic is "RBI introducing new payment products"
The RBI governor Shaktikanta Das has announced RBI is going to launch UPI-based payment products feature phone users soon. The Reserve Bank of India made an announcement in its bi-monthly monetary policy review on December 8, 2021 that it has raised the investment limit via UPI in IPOs and RBI Retail Direct Scheme for G-Secs to Rs 5 lakh. The limit for making investments in IPO and or buying government bonds via RBI Retail Direct Scheme is Rs 2 lakh currently.
Benefits with announcements:
- Under the RBI's retail direct scheme and IPO offering applications, the Governor raised the transaction limit to Rs 5 lakh from Rs 2 lakh for UPI payments.
- RBI's Retail Direct scheme alleviates investment by individuals into government securities by opening up gilt securities account with the central bank.
- The RBI Governor also granted on-device wallet in UPI for small value transactions. This might be helping to make the process of doing smaller value transactions easier and convenient.
- The Governor said that this will help intensify the UPI payments in the overall retail payments space and ease transaction for consumers.
- It will also help in easier investments into government securities and IPOs.
RBI will introduce a discussion paper on various charges in payment system which includes cards, wallets and UPI.
Other announcements regarding UPI payments include:
(a) Launch UPI-based payment products for feature phone users, leveraging on innovative products from the RBI's Regulatory Sandbox on Retail Payments.
(b) Make the process flow for small value transactions simpler through a mechanism of 'on-device' wallet in UPI applications.
How does UPI work?
It permits the transfer of money (transaction) from one bank account to another one's mobile phone instantly. Payments can be attained through an app such as BHIM, PhonePe, and Gpay etc. on mobile device only. The money transfer through UPI works on a 24x7 basis.
An individual must have a bank account with a member bank for eligible to use the UPI facility. Some of the member banks are: State Bank of India, HDFC Bank and ICICI Bank.
Question & Answer:
Q1. Under RBI retail direct scheme and IPO offering applications, the transaction limit has been raised to how much from Rs 2 lakh for UPI payments?
Ans. Rs 5 lakh
Q2. Gilt account can be opened with which institution/bank?
Ans. Reserve Bank of India
Q3. Who has announced to launch UPI-based payment products feature phone users?
Ans. Shaktikanta Das (RBI governor)
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