INDIA Trends and Developments Contributed by: Shilpa Mankar Ahluwalia, Himanshu Malhotra and Lidia K. Kharmih, Shardul Amarchand Mangaldas & Co
tion data. Moreover, card issuers are required to ensure compliance with the RBI’s guidelines for outsourcing of information technology services, ensuring that the cardholder’s data is shared with outsourcing partners only after obtaining explicit consent and that only data that is essential for performing outsourced functions is shared. To protect cardholders from unfair financial practices, the RBI has stipulated that interest must only be levied on the outstanding amount, adjusted for payments, refunds or reversed transactions. Card issuers are now required to advise cardholders against making payments through unauthorised methods and to list authorised payment modes on their websites and billing statements. Further, card issuers are required to establish board-approved standard operating proce - dures for blocking, deactivating or suspension of cards. In such cases, immediate notification must be sent to the cardholder with details of the reasons for the action. Collectively, these measures underscore the RBI’s commitment to fostering a consumer- friendly, transparent and secure card payment ecosystem, addressing both operational ineffi - ciencies and customer grievances. UPI-enabled payments UPI is a digital payment method that facilitates quick and convenient transfer of funds, from one bank account/wallet to another, via UPI appli - cations on a mobile device. UPI transactions have witnessed remarkable growth in recent years, emerging as the leading mode of digital payments in India by transaction volume. This surge encompasses both customer-to-merchant payments and peer-to-peer transfers, driven by advancements in mobile technology, robust net -
work infrastructure and a seamless onboarding process for users. In 2024, UPI facilitated over 172 billion transactions, amounting to a value exceeding INR246 lakh crore. The Bharat Bill Payment System (BBPS) serves as a unified payment ecosystem for bill pay - ments. It provides an interoperable platform that allows customers to pay various bills, including utility bills, mobile recharges, and subscription fees, through multiple channels such as inter - net banking, mobile applications, ATMs, bank branches, agents and business correspondents. In 2024, BBPS processed over 2.1 billion trans - actions, totalling more than INR7.6 lakh crore in value, underscoring its growing adoption and utility. Digital Lending Customer protection The RBI has introduced measures aimed at harmonising Key Fact Statements (KFS) and ensuring uniform disclosure of the Annual Per - centage Rate (APR) across all retail and MSME term loan products offered by regulated entities (REs). These measures seek to address informa - tion asymmetry in financial products, empower - ing borrowers to make more informed decisions. By standardising disclosures, the RBI intends to foster greater transparency and enable borrow - ers to better understand the cost of credit and terms associated with loans extended by differ - ent lenders. Following this, the RBI took further steps to address unfair interest-charging practices observed among lenders. The regulator high - lighted instances where REs charged interest unfairly, such as: (i) levying interest from the date of loan sanction or execution of the loan agreement, rather than from the actual date of disbursement of funds to the borrower; (ii) cal -
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