A draft technical report on
making payment system effective was released by Reserve Bank of India on 7
February 2014.
RBI in its report of the Technical Committee on Enabling Public
Key Infrastructure (PKI) in Payment System Applications said that the objective
of an effective payment system is to ensure a safe, secure, efficient, robust
and sound payment system in the country.
RBI
has kept the report open for public comment and suggestions till 28 February
2014. Public Key Infrastructure enabled electronic payment systems that has
been introduced by the RBI are
•
RTGS
•
NEFT
•
CBLO
•
FOREX Clearing
•
Government Securities Clearing
•
Cheque Truncation System (CTS)
The
RBI report said that in the year 2012-13 the non-PKI enabled payment system
like clearing of MICR/Non MICR, electronic credit system, credit card and debit
cards contributed to 75 percent, which in value terms is only 6.3 percent. It
also mentioned that the payment systems enabled on non-PKI, MICR clearing and
non-MICR clearing contributed to 37 percent and 10 percent in volume terms and
69 percent and 25 percent in value terms.
The
report in its highlights has also included security features in existing
payment system applications and feasibility in implementing PKI in all payments
system applications. The Group has also recommended that banks may carry out in
phases PKI implementation for authentication and transaction verification.The
report has also mentioned that the issuing banks will also have to convert the older
credit or debit cards with the magstripe into EVM chip and pin-enabled ones.
The
systems of payment are subjected to various financial risks like
•
Credit risk
•
Liquidity risk
•
Systemic risk
•
Operational risk
•
Legal risk
The
need to recognise the security and safety to be robust was needed following the
increase in the adoption of electronic payment products and delivery channels
for transactional needs. The Reserve Bank of India had, in September 2013,
constituted a group to prepare an approach paper for enabling PKI for Payment
Systems in India. The members of the constituted group were from banks (State
Bank of India and ICICI bank), Institute for Development and Research in
Banking Technology-Certifying Authority (IDRBT-CA), Controller of Certifying
Authority (CCA), New Delhi and Reserve Bank of India [(Department of Technology
(DIT), Department of Payment and Settlement Systems (DPSS), Department of
Government and Bank Accounts (DGBA) – Core Banking Solution (CBS) and Chief
Information Security Officer (CISO).
About Reserve Bank of India
The
Reserve Bank of India was established on 1 April 1935 in accordance with the
provisions of the Reserve Bank of India Act, 1934. Its central office in the
year was established in Calcutta, which was shifted to Mumbai in 1937. The
Governor of India sits in the head office of RBI in Mumbai, where the policies
of the bank are also formulated. Government of India owns RBI since 1949,
before it was privately owned institution.