RBI opposition to Payment Regulator
The Reserve Bank of India (RBI) has opposed a move to establish a separate entity to regulate payments and settlements, a function that is currently under the central bank’s purview.
In September, the Centre had set up a 11-member committee on Digital Payments headed by Finance Secretary Ratan Watal. The panel was to have laid out a roadmap for digital payments, which at present stand at 20 per cent of all transactions. A key goal is to halve India’s cash-to-GDP ratio to six per cent.
Recommendations of the committee
The committee had suggested that a separate board for retail payments PRB (Payments Regulatory Board) be an independent body. The report comes at a time when the Centre is pushing to boost digital payments in the wake of the withdrawal of high-value currency notes.
Opposition by RBI on following grounds
The global experience, by and large, has been that the retail payment systems are under the central bank for a variety of reasons including the role of the central bank as the lender of last resort.