Digital lists measures to cut cash usage: Government Committee
NEW DELHI: You could be charged for cash usage if the government accepts the recommendation of a panel set up to suggest ways to encourage digital payments but then you will also be able to pay equally easily using your mobile and Aadhaar-based systems.
A committee, headed by former finance secretary Ratan Watal, has suggested a 30-90 days’ timeline for implementing a number of measures that it hopes can cut in half India’s cash usage from 12% of GDP in three years.
The committee has suggested an independent mechanism within the overall central banking structure, and amendments in the payments and settlement laws and disincentive for cash usage among host of other measures to help shift towards a less cash society.
The government has been pitching for a less-cash economy after it demonetised old Rs 500 and Rs 1,000 notes on November 8.
“The situation needs to be reviewed from the perspective of an ordinary Indian – Why Digital? For all its inefficiencies, cash offers instant settlement, 24×7 up-time, familiarity and an illusionof zero transaction cost,” the committee has said while calling for a cost to cash usage and creating awareness and transparency on cost of cash.
The committee has pitched for greater use of Aadhaar and mobile numbers for making digital payments as easy as cash. “Mobile number and Aadhaar-based fully inter-operable payments should be prioritized,” the committee has suggested while calling for inter-operable payments between bank and non-banks as well as within non-banks.
To give the entire digital payments effort a focused boost, in its most significant recommendation it has proposed to make regulation of payments independent from the function of central banking.
The Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) can be given an independent statutory status within the overall structure of the RBI and called Payments Regulatory Board, the committee has suggested. The BPSS currently functions as a sub-committee of the Central Board of RBI.
The committee has called for amendments to the Payments and Settlement Systems Act, 2007 to provide for this board apart from giving an explicit mandate for competition and innovation, open access and interoperability, consumer protection, regulations on systemic risks and data protection.
It has suggested encouragement to digital payments within the government, a suggestion that has already rolled out with government prescribing thresholds and waiving charges. A ‘DIPAYAN’ fund is proposed from savings generated from cashless transactions to expand digital payments along with a ranking of states, government departments, districts and panchayats to encourage digital payments.
Operations of payment systems like Real Time Gross Settlement (RTGS) and National Electronic Fund Transafer (NEFT) could be outsourced after a cost benefit analysis. These payment systems should be upgraded to 24×7 in due course of time, the committee has suggested.
Source: ETT
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