Source: www.rbi.org.in
The advent of modernization has
introduced many technology dependent miracles. Advancement in the innovative
skills of human labour have facilitated the development of a digital
infrastructure which caters the multiple needs of the individuals over virtual
platform thereby inculcating independent handling by them. Internet is
increasingly becoming the medium of carrying out all major present-day
activities including information dissemination, communication, commercial
transactions, banking functions, etc. This has led to the elevation of the
standards of living and has raised the number of e- payments modes.
Online
Payments in India
India finds a vast segment of its
population now dependent on technology for carrying out number of transactions.
The Government has also made efforts for promoting cashless mode of dealings
through the digitalization. The payment vis this mode requires the submission
of personal and sensitive information of an individual. Considering the vital
nature of the information being shared, essential monitoring and control of
transmission of such data is required to ensure the provision of a safe and
viable payment system within the country.
Online payments in India are regulated by the
National Payments Corporation of India (hereinafter referred to as “NPCI”) uses
unified payment interface (hereinafter referred to as “UPI”) an instant
real-time payment system developed by NPCI regulated by Reserve Bank of India
(hereinafter referred to as “RBI”) that facilitates banking operations occurring
on the web-platform.
RBI monitoring
In order to have unfettered supervisory access
to data stored with payment companies as also with their service providers /
intermediaries/ third party vendors and other entities in the payment ecosystem
for better monitoring of the payment transactions in India, RBI vide its
notification dated April 6, 2018[1]
imposed norms regulating data localization (hereinafter referred to as “RBI
regulation”). The RBI regulation requires all system providers to ensure that
the entire data including the complete transaction details and information
regarding the payment instruction relating to payment systems operated by them,
are stored in a system only in India October 15, 2018 onwards.
Response by the Payment
Companies
Confronted with the challenges such as lack of
available servers
or data centres in India, administrative cost, compliance burden and
time-consuming process being involved therein, the payment companies expressed
their concerns to the RBI. However, RBI refused to accept the representations
made by the payment entities requesting for the relaxation of norms stated in
the RBI regulation seeking the adherence to the same by the deadline provided
therein. RBI mandated for the submission of a report in ensuring compliance and
clarified that any event of non-obedience to the said directive would entail
punitive action against the defaulters.[2]
The
consequence…
Attributable to the strict nature
of the instructions provided in the RBI regulation, renowned entities such as
Visa and Mastercard are in the process of compliance to the data localization
policy.[3]
Understanding the confidential
nature of data being provided by the customers to these service providers and
the impact of the violation of its safety, almost 80% players in this sector
have commenced the procedure of compliance to the RBI regulation including
submission of proposals to RBI in the said regard. The stringent monitoring by
RBI aims to create a more effective and secure data protection regime in India
by monitoring the payments done in India.
No comments:
Post a Comment