The Committee on Digital Payments headed by Ratan P Watal in December 2016 submitted its report to the Union Ministry of Finance.
The committee was formed by the Union Government to suggest measures for increasing digital financial transactions across the country. Accordingly, it has suggested the following recommendations in its report.
• Make regulation of payments independent from the purview of the Reserve Bank of India (RBI).
• Update the current Payments and Settlement Systems Act, 2007.
• Promote digital payments and receipts within Government.
• Create a fund proposed as DIPAYAN from savings generated from cash-less transactions.
• Create a ranking and reward framework to encourage and recognise government agencies who lead the efforts on enabling digital payments.
• Consider outsourcing the operations of payment systems like Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT).
• Upgrade payment systems like RTGS and NEFT to operate on a 24x7 basis in the due course of time.
• Allow non-bank payment service providers (PSPs) to directly access payment systems.
• National Payments Corporation of India (NPCI) should be made payments centric in its ownership and objectives.
• Enable payments to be inter-operable between bank and non-banks as well as within non-banks.
• Create a formal mechanism to enable innovations and new business models.
• Implement other measures to promote digital payments.
In addition to the above recommendations, the committee also suggested other measures to promote digital payments including
• Promoting Aadhaar based eKYC and paperless authentication
• Providing disincentives for usage of cash
• Creating awareness and transparency on cost of cash
• The committee to review the framework related to digital payments was formed by the Union Government on 23 August 2016.
• The 11-member committee was headed by Ratan P Watal. He is a former finance secretary. At present, he is a principal advisor to the NITI Aayog.
• Among the other things, the committee was asked to review the Payment and Settlement System Act, 2007, the Reserve Bank of India Act, 1934 and Information Technology Act, 2000.
What: Submitted report
When: December 2016