Reserve Bank of India Current Affairs - 2019
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The Reserve Bank of India (RBI) appointed committee on ‘suggestions on promoting digital payment’ has submitted its report to RBI Governor Shaktikanta Das. The committee was headed by Nandan Nilekani, also known as Aadhaar Architect.
- Background: In January 2019 RBI had set up a five-member panel headed by Nilekani, on deepening digital payments with a view of encouraging digitisation of payments and enhancing financial inclusion via digitisation.
- Panel Members: Besides Nandan Nilekani (Infosys co-founder), H R Khan (former RBI deputy governor), Kishore Sansi (former MD and CEO of Vijaya Bank), Aruna Sharma (former secretary in ministries of IT and steel) and Sanjay Jain (chief innovation officer, Centre for Innovation, Incubation & Entrepreneurship (CIIE), IIM Ahmedabad).
- The panel was tasked to review existing status of digitisation of payments in India, identify current gaps in ecosystem and suggest ways to bridge them. It also assessed current levels of digital payments in financial inclusion.
- It undertook cross country analyses with a view of identifying best practices which can be adopted in India so as to accelerate digitisation of economy and financial inclusion through greater use of digital payments.
- RBI will examine recommendations given by committee and will link action points, wherever required and necessary, in its ‘Payment and Settlement Systems in India: Vision 2019 – 2021‘ for implementation.
- The Payment Systems Vision 2021 was recently released by RBI. It seeks to ensure a secure, safe, quick, affordable and convenient, e-payment system with aim of making India a ‘cash-lite’ society.
Tags: Aadhaar Architect • Centre for Innovation • Digital India • Digitisation of Payments • Incubation & Entrepreneurship • Nandan Nilekani • Nilekani Panel on Digital Payments • Payment And Settlement Systems In India: Vision 2019 – 2021 • RBI • RBI Governor • Reserve Bank of India • Shaktikanta Das
The Reserve Bank of India (RBI) has released a vision document to ensure a more convenient, affordable, quick, safer and secure e-payment system. The RBI’s vision document is titled ‘Payment And Settlement Systems In India: Vision 2019 – 2021’
Key Highlights about Vision Document
- Reason: The vision document is released on a pretext that as per RBI’s speculations number of digital transactions in country is expected to increase more than four times to 8,707 crore in December 2021. Also, digital payment systems like UPI and IMPS are most likely to register an average annual growth of more than 100%, and NEFT will grow at 40%, over the period of 2019 – 2021.
- Core Theme of Vision Document: Empowering Exceptional E-payment Experience.
- Objective: It envisages achieving “a highly digital and cash-lite society”. To achieve its objective the goal posts of RBI involves 4Cs, namely convenience, confidence, competition and cost-effectiveness.
- Implementation Period: The bank will implement the approach outlined in this Vision Document during period 2019 – 2021.
- Approach Adopted: by RBI will continue to be that of minimal intervention in pricing of charges to customers for digital payments and RBI’s all efforts will be to facilitate the operation of payment systems which are more efficient and more price-attractive.
- Key Feature of Document:
- It talks about creating customer awareness, setting up a a self-regulatory organisation and 24X7 operational helpline for system operators as well as for service providers, among others.
- The ‘No-Compromise’ approach towards security and safety of payment systems will remain a hallmark of vision.
- No specific target has been considered for reducing cash in circulation.
Throughout the world the payment systems landscape will continue to change with entry of more players and further innovations in sector. But it is expected that this will ensure optimal cost to customers and freer access to multiple payment system options.
Tags: Digital India • Digital Payment • e-Payment System • Empowering Exceptional E-payment Experience • Payment And Settlement Systems In India: Vision 2019 – 2021 • RBIs Vision Document (2019-2021) • Reserve Bank of India