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January 4, 2022

Indian central bank issues framework for offline digital payments

The Reserve Bank of India (RBI), the central bank of the country, has unveiled a framework to enable same value digital transactions in offline mode.

According to RBI, an offline digital payment involves a transaction that does not require internet or telecom connectivity.

Under the new framework, offline digital payments are allowed to be carried out face-to-face (proximity mode) using any channel or instrument such as cards, wallets, mobile devices, etc.

The framework, which is applicable with immediate effect, is based on the feedback received from the pilot experiments on offline transactions. These experiments were carried out from September 2020 to June 2021 in several parts of the country.

The offline mode payments will not need an Additional Factor of Authentication (AFA) and would alert customer by way of SMS and/or e-mail.

As per the framework, upper limit for each of the offline payment transactions is set at $2.68 (INR200) while the overall limit is $26.88 (INR2,000) for all transactions.

In a press statement, RBI said: “Offline transactions are expected to give a push to digital transactions in areas with poor or weak internet or telecom connectivity, particularly in semi-urban and rural areas. The new framework is applicable with immediate effect.”

RBI said that the offline mode of payment can be enabled following customer’s specific consent.

Recently, RBI approved Fino Payments Bank to start an international remittance business, under the money transfer service scheme (MTSS).

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