RBI to meet on payment & settlement system by month-end

MUMBAI: The Reserve Bank will hold a meeting by month end to discuss the payment and settlement system, executive director G Padmanabhan said here today.

The central bank had issued a vision document on payment system concerning to cards, ATMs, internet and mobile in 2009, which was open for feedback from various stakeholders.

"The RBI will hold a meeting by the end of the month to discuss the issues relating to payment and settlement system," Padmanabhan said addressing an event organised by the Internet and Mobile Association of India (IAMAI) here.

The meeting, which would discuss the vision document, will take into account the changes required in the payment system and is likely to come up with final guidelines.

The KYC ( know your customer) guidelines should be strengthened with the help of industry players, he said.

"The industry can work for improving the methods of the KYC," he said adding that new 'Aadhar' card can be used to improve the KYC procedures.

Referring to demand for increasing the transaction limit, Padmanabhan said without proper KYC it would compromise safety and may lead to instances of money laundering.

There were various instances of loopholes found in the payment system during the first onsite inspection conducted by the central bank recently, he mentioned.

On the payment and settlement system, Bank of America Merrill Lynch India chief economist Indranil Sengupta said increasing use of alternate payment system will improve transparency in the system.

Visa India & South Asia country manager Uttam Nayak also had a similar view.

"Only 3 percent of payment had moved to electronic mode against a global average of 16 percent. So, we have to increase awareness to use alternate payment systems like cards at point of sales (PoS), which will help in financial inclusion," Nayak said.