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New Delhi: The Reserve Bank of India (RBI) on Friday retained the repo rate unchanged at 6.5 per cent for the fourth time in a row, as it maintains a tight vigil on inflation. The Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged, RBI Governor Shaktikanta Das said while announcing the bi-monthly monetary policy.
Notably, the rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022. The RBI had raised the repo rate by 40 basis points in May, 50 basis points in June, and 50 basis points each in August, September, October, and December 2022.
The RBI also extended the card-on-file tokenisation or token creation facility at the level of the issuer bank. It was earlier available only through merchant applications or websites. This means that customers can now tokenise their cards directly with their banks, instead of having to do so through a merchant. This will make the tokenisation process more convenient and secure for customers.
“It is now proposed to introduce CoF token creation facilities directly at the issuer bank level. This measure will enhance convenience for cardholders to get tokens created and linked to their existing accounts with various e-commerce applications. Instructions in this regard will be issued separately,” RBI Governor Shaktikanta Das said.
Tokenisation is the process of replacing a card’s 16-digit number with a unique alternate card number, or ‘token’. This token can then be used to make payments without having to reveal the actual card number. This makes tokenisation a more secure way to make online payments.
Card-on-file tokenisation offers a number of benefits to both customers and merchants. For customers, tokenisation makes online payments more secure and convenient. For merchants, tokenisation helps to reduce fraud and chargebacks.
The RBI’s tokenisation facility, which was launched on October 1, 2022, has been successful in making online payments more secure. Over 56 crore tokens have been created and over Rs 5 lakh transactions have been done using these tokens. Tokenisation has also helped to improve the transaction approval rate.
However, banks still need RBI guidelines for the tokenisation facility, which will be issued soon. This will make it easier for cardholders, who currently have to tokenise their cards separately with each merchant. The RBI’s tokenisation facility is a welcome step towards making online payments more secure and convenient for everyone.
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