Ombudsman Scheme for PPI issuers

By Simran Jalan (simran@vinodkothari.com)

Introduction

The payment technology has evolved and the number of digital transactions is increasing enormously. With this rapid adoption of digital mode of transactions, there was an emerging need for an expeditious grievance redressal mechanism for strengthening the consumer confidence in this channel. Consequently, the Reserve Bank of India (RBI) has issued an Ombudsman Scheme for Digital Transactions, 2019[1] (Ombudsman Scheme) to provide a mechanism for redressal of complaints against deficiency in services related to digital transactions.

In this article we shall discuss the important provisions of the scheme and their impact on Prepaid Payment Instrument (PPI) issuers.

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RBI Bi-monthly Credit Policy: NBFCs moved to a ratings-based risk weight regime

By Finacial Services Division (finserv@vinodkothari.com)

The RBI’s Statement on Developmental and Regulatory Policies dated February 1, 2019 proposes that henceforth, bank lending to NBFCs will be risk-weighted based on the Basel II risk weights, based on the rating of the NBFC in question. This facility was earlier available only to asset finance companies, and has now been proposed to be extended to all NBFCs, excluding core investment companies (CICs). The likely impact of this new dispensation may be to encourage banks  to lend to NBFCs other than the asset finance companies, such as those focusing on loans against properties, personal loans, or loans other than to productive assets. This measure may be aimed at easing the present liquidity strain affecting the NBFC sector, though, it is not sure whether the lower risk weight itself will be a strong motivator for banks to consider lending to NBFCs. Read more