RBI plans to boost payments system

The Reserve Bank of India on Thursday said it intended to boost the overall payment system in the country to improve its coverage, convenience, confidence, convergence and cost.

The statement comes at a time when there is a renewed thrust to boost the payments infrastructure in drive towards a less-cash economy with new digital tools - from electronic wallets to unified payment interface - being deployed across the country. The demonetisation drive has resulted in a large shift towards these new payment options as consumers moved to other payment means to beat the shortage of cash. It has also received a fillip as RBI and the government sought to waive charges, with efforts being made to reduce them in the coming months.

In its annual Trends and Progress Report, RBI also said that it planned to address customer service-related concerns in the non-banking segment with the regulator planning to design an ombudsman scheme for non-bank finance companies (NBFCs), which have become major players in the system, especially in segments such as home loans.

It also said that RBI will explore newer areas to make the regulatory and supervisory system for banks more robust, besides exploring the possibility of creating new kinds of differentiated banks, such as custodian and wholesale financing entities.In recent years, the government and the regulator have tried to create space for newer type of entities such as payments banks, which are meant to deal with remittances and reach out to population in unbanked or underbanked areas. Already entities promoted by mobile players Airtel and Reliance have begun operations and Paytm and India Post are expected to join soon.

The report also talked about scaling up the business correspondent model, which has an integral part of the drive towards financial inclusion. RBI said the scaling up will include expanding the outreach to remote rural areas through registry, certification and training of these entities. The business correspondents have proved handy in distribution of cash in rural areas.