The Hindu Business Line : Panel seeks detailed talks on National Payment Corp

New Delhi May 16 The Standing Committee on Finance has urged the Government to hold detailed consultations on the proposed National Payment Corporation of India (NPCI), which is expected to take over the operations of retail payment systems in the country.

The suggestion follows reservations expressed by the Reserve Bank's Officers and Employees Association.

The consultations should cover the `business model' envisaged, terms and conditions of licensing the proposed company and service conditions of employees currently engaged in clearing house operations, the Standing Committee said in its report on the Payment and Settlement Systems Bill 2006.

The Standing Committee noted that the NPCI is proposed to be set up under Section 25 of the Companies Act whereby the profits earned would not be paid out, but ploughed back into the company for further development of payment systems.

The Finance Ministry had in a written reply to the Standing Committee said that the views expressed by many bank unions/associations regarding the NPCI were not well founded nor based on facts. "The proposed setting up of NPCI will neither lead to outsourcing or privatisation of clearing activities nor adversely affect the interest of the bank employees," the Finance Ministry said.

Meanwhile, Mr Rupchand Pal of CPM has in a dissent note said that the RBI should continue with its current role as a regulator, supervisor and also service provider.

He also highlighted that NPCI does not have the same experience or expertise as RBI does as the key service provider and manager of clearing houses.

"It is absolutely not in the interest of the national economy to disrupt the existing process and the ongoing processes of improvement of the payment system by the RBI. The creation of a private new entity meanwhile would only weaken the whole process of improvement," Mr Pal said.

More Stories on : Financial Services | RBI & Other Central Banks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Panel seeks detailed talks on National Payment Corp

Re strengthens against dollar

Intervention in currency market small: Rakesh Mohan

L&T Finance picks Nucleus solution

Bank of Baroda, D&B sign pact

`London Mayor visit will boost plans for global financial hub'

`Indian FIs keen on joint ventures in France'

Global Trade plans to raise over Rs 7,000 cr

Bond prices rise

Call rates end at 8.75%

General insurance officers oppose IPO move