Reserve Bank of India (RBI) aims at implementing various initiatives for a cash-lite India. RBI targets on implementing a list of twelve objectives by 2022. A few of the action items are to improve pricing, bring down the paper-based transactions, improving customer grievance redressal policies, setting up new payment system operators (PSO), initiating a four-fold increase in digitalised payments.
The central bank has published the Payment and Settlement System in India Vision 2019-21 document. This document comprises an exhaustive list of initiatives which needs to be carried out by all governing bodies and stakeholders to make sure the objectives are achieved in time.
Concerning targeted policy intervention, RBI has come up with four broad areas to enhance the existing payments system – competition, confidence, cost, and convenience. RBI also mentioned that along with aiming for a cashless society, there would be continuous effort to improve efficiency, to render endless supply of safe, affordable, and accessible payment systems to various segments of the population which were not exposed to payment systems earlier.
The central bank believes that card-based transactions will take a six-fold increase in the following three years driving the Indian economy towards becoming a “cash-lite” one. Currently, the most preferred payment mode used by customers is the “cash on delivery”. However, it is expected that the “cash on delivery” payment mode will reduce gradually.
The apex regulator has also considered increasing the duration window of RTGS and NEFT transactions and increasing the transaction limit. Further, a universal payment solution will be considered for users who do not have a smartphone and internet for futuristic development.
RBI also said that even though the internet speed in smartphones has improved to a large extent, the connectivity-based issues remain unsettled in large areas. Hence, rendering an option to make offline payments via mobile devices for promoting the idea of adopting digital payments would be the primary focus area during the vision period.
RBI restated that systematic regulatory alterations and projected increase in competition would result in payment services channels getting cheaper in the following three years. RBI has also planned to execute customer protection and fraud management initiatives like introducing a 24/7 helpline number, payment aggregators regulation, and a more elaborate ombudsman scheme.