RBI asks payment system players to store data in India

06 April, 2018, 04:17 | Author: Luis Fowler
  • Monetary policy: RBI lowers inflation target for first half of FY19

It was last revised in August 2017, when it was cut from 6.25 per cent to 6 per cent.

The Reserve Bank of India (RBI) announced the sweeping new policy on Thursday. Its prompt response in the form of liquidity injection to the tune of Rs6,000 crore and Rs21,300 crore on a net daily average basis in February and March, respectively, correctly addressed the issues of slump in confidence amid growing bond market uncertainties.

"Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies".

Bitcoin and other cryptocurrencies are not legal tender in India.

He added, "For the real estate sector, which has aligned to the government's ambitions, was looking for some encouragement that would move the needle towards accelerated growth". It will issue detailed guidelines in the next few days.

"In this unsettling global environment, it is especially important that domestic macroeconomic fundamentals are strengthened, deleveraging of distressed corporates and rebuilding of bank balance sheets persisted with, and the risk-sharing markets deepened", the RBI said.

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"We recognise that blockchain technology or the distributed ledger technology that lies beneath the virtual currencies has a potential benefit for financial inclusion and enhancing the efficiency of the financial system. Also, the monsoon will slow down site visits post June, and any positive step on part of the RBI this time around would have been welcome", said Dr. Niranjan Hiranandani. RBI wants the players to store their entire data within the country and has given six months time to do so.

The government had planned to "take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system", India's finance minister told lawmakers in New Delhi in February, according to a transcript by The Hindu newspaper.

The Reserve Bank of India (RBI) has made a decision to ensure that all payment system operators stored the data, relating to the payment systems operated by them, within the country in six months.

"It is essential to ensure we have a robust system for the safety and security of data on payment systems".

Shilpa Mankar Ahluwalia, partner at law firm Shardul Amarchand Mangaldas, said that it is unclear at this stage whether this requirement will extend to only licensed entities (such as wallet issuers) or also apply to the payment gateways and intermediaries.

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