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Framework for retail digital payments in offline mode to be available soon, says RBI

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The Reserve Bank of India (RBI) on Friday said that offline payments mechanisms will soon be made available throughout the country.

Framework for retail digital payments in offline mode to be available soon, says RBI
The Reserve Bank of India (RBI) on Friday said that offline payments mechanisms will soon be made available throughout the country. As per the announcement, customers who face internet connectivity issues, which don’t allow them to make payments using online digital modes will now be able to use the offline payment mechanisms to make payments in due course.
“A scheme to test technologies that enable digital payments even in remote places where internet connectivity is either absent or barely available was announced in August 2020. Given the encouraging experience gained from the pilot tests, it is proposed to introduce a framework for retail digital payments in offline mode across the country. This will further expand the reach of digital payments and open up new opportunities for individuals and businesses,” RBI Governor Shaktikanta Das said.
According to Shivaji Thapliyal, Lead Analyst - Institutional Equities, YES SECURITIES, this service will popularize digital payments in areas will low internet penetration.
Adding to it, Deepak Chandnani, MD- South Asia & Middle East, Worldline said that the proposed framework to enable digital payment solutions in offline mode will certainly push forward their adoption particularly in rural pockets of the country that have a higher preponderance of poor network connectivity and quality.
“While this is primarily for the acceptance of small value transactions only, it is a big move towards achieving the overall financial inclusion objectives of the country,” he said.
Welcoming the move, SS Mallikarjuna Rao, MD and CEO at Punjab National Bank said that this is another step in a journey towards creating digital financial infrastructure.
Meanwhile, the central bank decided to keep the benchmark interest rate unchanged at 4 percent but maintained an accommodative stance even as the economy is showing signs of recovery after the second COVID wave. This is the eighth time in a row that the Monetary Policy Committee (MPC) headed by Das has maintained the status quo.
RBI had last revised its policy repo rate or the short-term lending rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low. MPC decided to keep the benchmark repurchase (repo) rate at 4 percent, Das said while announcing the bi-monthly monetary policy review.
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