On June 4, 2019, The Reserve Bank of India (RBI) released a report on “Benchmarking India’s Payment Systems”. It provides a comparative position of the payment system ecosystem in India. RBI in its monetary policy statement in July had stated that benchmarking India’s payments systems was necessary. As a result, the report was released.
- RBI had undertaken an exercise of benchmarking India’s Payment’s system compared to the payment systems of advanced economies, Asian economies and the BRICS nations.
- The analysis was conducted under 41 indicators. It covered 21 broad areas including regulation, oversight, payment systems, payment instruments, payment infrastructure, utility payments, Government payments, customer protection and grievance redressal, securities settlement and clearing systems and cross border personal remittances.
- As per the Report, India has a strong regulatory system and robust large value and retail payment systems, which have contributed to the rapid growth in the volume of transactions in the payment systems.
- The country is required to take further efforts to bring down the volume of paper clearing and increase acceptance infrastructure to enhance digital payments.
- It pointed out that India is strong in areas like having necessary laws and cash in circulation per capita. But weak in few parameters like decline of usage of cheques, share of card payments in payments systems and value of card payments to quantum of cash in circulation.
- The relatively high level of cash in circulation offered scope for higher level of digitization of payments and the decline in cheque usage had been slow.
- The digital payment of utility bills is very low. However, the Bharat Bill Payment System, an integrated interoperable bill payment system which commenced operations on October 12, 2017, is expected to facilitate digital payment of utility bills like electricity, telecom, direct-to-home, gas, and water.
- It stated that India is a “leader” in regulating costs of payments systems, number of debit cards issued and automated teller machines.
About Reserve Bank Of India:
♦ Headquarters: Mumbai
♦ Governor: Shaktikanta Das
♦ Deputy Governors: BP Kanungo, N S Vishwanathan, Viral Acharya and Mahesh Kumar Jain