Raghuram Rajan’s payments plan set to get delayed

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MUMBAI: Even as banks brace for the eventual exit of Reserve Bank of India governor Raghuram Rajan in September, they are also busy filling in the Unified Payments Interface (UPI), the July 15 launch of which may get delayed due to unfinished technicalities.

But people connected with preparing the structure and framework for UPI, which is one of Rajan’s initiatives, say launch would be possible only in September.

UPI, launched last month by the National Payments Corporation of India, an umbrella organisation for all retail payments system, aims to make money transfers via mobile banking as simple as sending text messages.

Both State Bank of India, the country’s largest bank, and Bank of Baroda are set for a September launch as the roll out will be delayed by gaps in completing security and ease of transaction systems.

At the launch of UPI, SBI MD Rajnish Kumar had said, “there is a need to ensure that these transactions are flawless, without failure, and in the case of a failed transaction there should be auto reversal of money… At the end of the day, I can auto reverse my (SBI’s failed) transactions, but that is not the case when other banks are involved.”

The rollout was to be done phase wise, with the NPCI selecting 29 banks in the first phase with a rollout in June. However, 17 of those banks including Punjab National Bank, Union Bank of India, ICICI and Axis Bank are expected to roll out their UPI enabled apps next month, NPCI said.

Dilip Asbe, chief operating officer at NPCI said, “Right now we are trying to eliminate a few things in the process. While this is a new system, we have to test it before we go public. We wanted the P-to-P (person-to-person) as well as P-to-M (person-to-merchant) systems on. So we are working with banks on getting big merchants.”

The UPI platform will combine all the bank accounts operating on a single platform and will require only one step of authentication in the form a unique ID. “I do not see any major security issues. As any new payment system, UPI will take 12-18 months to settle. Banks would continue to use their existing apps and make them more UPI compliant, which does not require too much effort,” said Asbe.