A high powered panel to recommend measures to boost digital payments has called for a Payments Regulatory Board and has also urged the government to accept and promote such payments.
“The vision of the committee is to set a roadmap for digital payments to grow substantially over the next three years from the current level of about five percent of personal consumption and twenty per cent of all transactions,” said the report of the Committee on Digital Payments.
It also wants to halve India’s cash to GDP ratio from 12 per cent to 6 per cent over the next three years.
The Finance Ministry has sought comments from the public on the report in the next 15 days and indications are that some of its recommendations would find a place in the Union Budget 2017-18.
The committee, chaired by Ratan Watal, special adviser NITI Aayog and former Finance Secretary, has suggested that the regulation of payments should be made independent from the function of central banking by the Reserve Bank of India. The Board for Regulation and Supervision of Payment and Settlement Systems should be given a statutory status over the next 30 days.
It has also said that the Government should promote digital payments and receipts by adopting digital payments for all its needs and withdrawing all charges levied by departments and utilities on digital payments and bear the cost of such transactions.
It has also called for mandating government departments and agencies to provide option to consumers to pay digitally as well as incentivise consumers to make payments (including payment of fines and penalties) to Government electronically by giving a discount or cash back.
Consumers should also be “enabled to make payments (including taxes) to government through suitable digital means like cards and wallets”, it said, adding that the customs duties on payments acceptance equipment should also be lowered.
To protect consumer interests, it has also called for updating the current Payments and Settlements Systems Act, to include explicit mandates for data protection and security, regulatory governance and consumer protection including penalties and independent appeal mechanism.
Further, payment systems like RTGS and NEFT should also be updated to ensure that they work on a 24x7 basis.
The committee has also called for promoting Aadaar based eKYC and paperless authentication including in cases where Permanent Account Number has not been obtained. It said this should be done over the next 60 to 90 days and pursued actively by the Finance Ministry, RBI, UIDAI and Telecom Regulatory Authority of India.
Mobile number and Aadhaar based fully inter-operable payments should be prioritised and the National Payments Corporation of India should enable this on its platforms over a period of 60 days.