The Reserve Bank of India is looking at either removing or relaxing limits on the quantum of electronic fund transfer and electronic clearing system transactions to facilitate introduction of T+1 settlement system in the capital market.
"Removal or relaxation of limits on EFT and ECS transactions is under active consideration of the RBI but it will be done completely in a secured environment," RBI deputy governor Rakesh Mohan said in his inaugural address at a seminar organised by Indian Banks' Association and MAIT in Mumbai on Friday.
Currently, the limit on EFT is Rs 2 crore (Rs 20 million) per transaction and Rs 500,000 and Rs 100,000 for credit and debit transactions respectively under ECS, he said adding, the demand for reviewing these limits was coming, particularly from capital market participants.
Expressing concern over difficulties faced by small and medium enterprises in accessing credit, Mohan said banks are slow in developing customer profiles with use of technology.
Even credit assessment could be done faster, which would help bring down the cost for such advances.
On banks using technology, he said, "With the kind of squeeze on profit margins, the solution lies in volumes, which is possible with usage of technology".
Mohan said even in the Global Trust Bank moratorium, the RBI had to take into account the technology aspect leading to closing down of ATMs and restricting withdrawals only through branches.
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