The recent cyberattack engulfing 3.2 million bank debit cards is unlikely to come in the way of the government’s plans to support electronic transactions, including possible tax benefits for payments made through plastic money.
Plans are, however, afoot to fully ring-fence consumers from potential digital banking frauds.
A government-appointed panel, set up in August, has been tasked to suggest ways such as tax rebates and cash back to incentivise card and digital transactions.
It is collating the comments that it had invited from stakeholders till October 10.
The government intends to implement most of these measures within the next two years as part of a broader strategy to wean people away from cash transactions and clamp down on India’s bustling parallel economy that operates outside the legitimate financial system.
To reassure customers about the security of digital transactions, banks will be asked to complete investigations and credit funds back to fraud attack victims’ within 90 days.
A slew of banks are currently scurrying to protect customer data customers after a cyberattack on millions of card holders of several banks.
“The RBI and the financial services department (of the finance ministry) shall formulate a comprehensive customer protection policy for transactions through cards and digital means,” the source said.
The government is also examining the feasibility to create a history for all card and digital payments.
This is aimed at giving consumers instant, low-cost micro-credit by leveraging their credit history. This will create necessary linkages between payments transaction history and credit information.
The panel, headed by Ratan P Watal, Niti Aayog Principal Advisor and former finance secretary, is also studying changes that would be necessary in a string of legislations—the Payment and Settlement Systems Act, the RBI Act, and the Banking Regulation Act among others.
“Pay Gov India” will be turned into a single unified electronic gateway for public transactions central, state government and public sector undertakings.
Currently 64 departments and agencies are “live” on the Pay Gov India gateway. Another eight have completed integration and will go live soon. Integration is in progress with 28 agencies and the process has been initiated with another 86 departments.
“Discussions are on to introduce a single window system of payment gateway to accept all types cards and digital payments for government receipts and enable settlements between consumer and merchants via the National Payments Corporation of India (NPCI) or other agencies,” a source, who did not wish to be identified, said.
NPCI, set up in 2008, is an umbrella organisation for all retail payments system in India. NPCI’s ten promoter banks include State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC.
Plans are also on to use the Aadhar data base for authenticating card/digital transactions and set up a centralised Know Your Customer (KYC) registry.