New Delhi: Two new NPCI payment features and a pilot for instant settlement of corporate bonds were unveiled at the Global Fintech Fest on Thursday, expanding the use of digital technology in retail payments and securities transactions.
RBI Governor Sanjay Malhotra announced UPI ‘Tap & Pay’ on Point-of-Sale (POS) terminals and MyUPI, a customer support platform powered by the National Payments Corporation of India’s (NPCI) small language model, FiMI.
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Malhotra and SEBI Chairman Tuhin Kanta Pandey jointly announced Demat 2.0, a pilot that connects tokenised corporate bonds with the RBI’s wholesale central bank digital currency (CBDC) through its Unified Market Interface (UMI).
UPI Tap & Pay on POS terminals allows users to make payments by unlocking their NFC-enabled smartphones and tapping them on compatible terminals.
The feature uses the POS terminal’s internet connection, allowing transactions to be completed without relying on the customer’s mobile internet connectivity.
MyUPI, meanwhile, introduces AI-powered enhancements to UPI Help to improve customer support and strengthen safety and convenience across the payments network.
The bond pilot tests a new system for issuing, holding, trading and settling corporate bonds. Each bond is created as a digital token on a distributed ledger — a shared electronic record maintained by market infrastructure institutions and owned by the depositories.
The system enables “atomic settlement”, under which the bond and the payment move simultaneously.
“This (Demat 2.0) enables atomic settlement, i.e., the bond and the money move instantaneously,” SEBI said in a statement.
Interest payments and redemption can also be automated through smart contracts, which are instructions embedded in the ledger that execute automatically. Authorised institutions can access bondholder details on the shared record, while payments reach investors’ CBDC wallets on the due date.
“Taken together, these features are expected to make the issue, settlement and servicing of corporate bonds faster, more efficient and less error-prone,” the regulator said.
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REC, L&T and IIFL have so far issued tokenised bonds aggregating Rs 1,025 crore. The pilot is progressing in phases, with issuances under the first phase continuing.
Sebi said India was the first country to issue corporate bonds natively on a distributed ledger while keeping ownership records with statutory depositories and settling payments in central bank digital currency within the existing regulated market infrastructure.
While tokenisation pilots and commercial launches have taken place elsewhere, these have largely involved individual issuers operating on separate platforms, it added.
NPCI Non-Executive Chairman and Independent Director Ajay Kumar Choudhary, senior bankers and fintech founders were among those present at the event.
Established by the RBI and the Indian Banks’ Association, NPCI operates retail payment and settlement systems in India.
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