Newly appointed RBI Governor Sanjay Malhotra on Friday announced a 25-bps repo rate cut, giving much-needed relief to home and other loan borrowers who have long been waiting for their respective banks to slash rates. It, however, has to be seen how banks respond to RBI rate cut and whether they pass on this benefit to consumers immediately or not.
Besides this rate cut, the RBI governor has also announced some key measures for the banking sector as a whole with an aim to strengthen the regulatory mechanism around digital payments ecosystem and check the cyber frauds.
One of the key measures the central bank has taken is the introduction of Additional Factor of Authentication (AFA) for domestic digital payments.
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“The Reserve Bank has been taking various measures to enhance digital security in the banking and payments system. Introduction of Additional Factor of Authentication (AFA) for domestic digital payments is one such measure. It is proposed to extend AFA to online international digital payments made to offshore merchants, who are enabled for such authentication,” the RBI chief said in his statement post-MPC meeting.
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Talking about cyber security in the digital payment space, Malhotra said the rapid digitalisation of financial services has brought convenience and efficiency but has also increased exposure to cyber threats and digital risks, which are getting more sophisticated day by day.
“The surge in digital frauds is a matter of concern, warranting action by all stakeholders,” he noted.
Acknowledging the fact that banks and other financial institutions always remain under cyber threat risks, the governor exhorted banks and NBFCs to continuously improve preventive and detective controls to mitigate cyber risks. “They must develop robust incident response and
recovery mechanisms, reinforced through periodic testing, for operational resilience.”
Another big measure the governor announced today was about changing the internet domain of banks and non-bank lenders.
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