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With Expansion of Payment Ecosystem, Legal Changes Needed: SBI Official

With Expansion of Payment Ecosystem, Legal Changes Needed: SBI Official

Mumbai: A top official of State Bank of India on Monday said that with expansion of the payment ecosystem, there is a need for some amendments in the provisions for payments under the Negotiable Instruments Act.

"Some regulatory and legislative changes are required in view of the emerging payment ecosystem. Presently, most of the provisions of payments are drawn from Negotiable Instruments Act which is going to gradually lose utility in future," SBI managing director Rajnish Kumar said here.

SBI has raised the issue with the Reserve Bank of India, he added.

Mr Kumar, who was present at the launch of National Payments Corporation of India's Unified Payments Interface (UPI) on Monday, said SBI is committed to making the payment system successful.

"We are an integral part of the payment system in the country, being the largest bank. We are already working on a state-of-the-art application which will be integrated with the UPI," Mr Kumar said.

He, however, 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.

The number of daily ATM transactions in India was very high and if the failure rate shot up, the banks would find it difficult to handle customer complaints, he said.

"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," Mr Kumar said.

With UPI, number of small value transactions is going to be huge and resolution of customer complaints has to be an integral part if the system is to succeed, he said.