The Reserve Bank of India (RBI) has allowed authorized non-bank payment system providers (PSPs) to participate in centralized payment systems (CPS), like real-time gross settlement (RTGS) and national electronic fund transfer (NEFT), as direct members.

In a notification issued on Wednesday, the RBI said that on a review of extant arrangements and after detailed discussions with PSPs, it is advised that, "in the first phase, authorized non-bank PSPs, viz. PPI issuers, card networks and white label ATM operators shall be eligible to participate in CPS as direct members". The April 2021 monetary policy, RBI had announced such a move in phased manner.

It also brings advantages to non-banks like reduction in cost of payments, minimizing dependence on banks, reducing the time taken for completing payments, eliminating the uncertainty in the finality of the payments as the settlement is carried out in central bank money, the notification said.

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