Expansion of e-payment channel among reform steps announced
To protect the returns on retail investors’ investments from inflation, the Government in association with the RBI will introduce inflation-indexed savings certificates linked to the consumer price index (CPI) based inflation.
Announcing big reform measures after taking over as the central bank Governor, Raghuram Rajan has tried to do households a good turn.
“Households have expressed a desire to be protected against CPI inflation. Together with the Government, we will issue inflation-indexed savings certificates linked to the CPI New Index to retail investors by end-November 2013,” Rajan said in his first media interaction as the RBI Governor.
Also, households will be able to use bank accounts to pay school fees, utilities, medical bills and make person-to-person transfers electronically under a national grid-based Indian Bill Payment System.
Among other measures, a pilot will be conducted to enable holders of pre-paid instruments, which have been issued by non-bank entities, to withdraw cash from the outstanding balances in their pre-paid cards or electronic wallets. This will be on Aadhaar-based identification.
Rajan also allowed setting up of point-of-sale (POS) terminals by non-banking entities. Only banks are currently allowed to deploy POS terminals, and these are largely set up by a few banks in urban areas.
As announced in the Annual Monetary Policy statement, RBI will facilitate the setting up of “white” POS devices and mini ATMs by non-bank entities to improve access to financial services in rural and remote areas.
Another reform is with regard to mobile-based payments.
The RBI will set up a Technical Committee to examine the feasibility of using encrypted SMS-based funds transfer using an application that can run on any type of handset. “Mobile payments can be a game changer both in the financial sector as well as to mobile companies,” Rajan said.