The RBI has recently decided to allow non-bank entities to participate in the Centralised Processing System (CPS).
- Present status: RBI's centralised processing system (CPS) includes NEFT and RTGS. As of now, only the Banks have access to RBI's CPS. Non-Banking entities such as Pre-paid Instrument (PPI) issuers, White label ATM Operators, Card networks etc. do not have direct access to RBI's CPS. These entities basically rely on the Banks for the purpose of payment and settlement of transactions.
- Announcement: Certain non-banking entities such as Pre-paid Instrument issuers (Paytm wallet, Ola money, Amazon pay, PhonePe etc.), White label ATM operators, Card networks would be allowed to have direct access to CPS.
- Example: Amazon is a PPI issuer. Now, Amazon can use CPS directly for making payment and settlement of transactions with the merchants. Earlier, it had to rely on Banks. Similarly, you can use NEFT or RTGS to load your PPIs such as Paytm Wallet, Amazon pay balance, Phonepe, PayU money etc.
- Benefits: Reduce dependence on Banks + Competition and Innovation as non-Banks can compete with Banks + reduce delay in execution of funds transfer + Better risk management as the settlement is carried out through RBI.