In a bid to encourage online payments in India, Nandan Nilekani-led Reserve Bank of India (RBI) committee is planning to recommend to make all government payments to citizens digital.
Citing unnamed sources, a Livemint report said that the idea behind the move is to ensure higher adoption of online payments among citizens who avail government benefits. The source also added that currently, 80% of government payments to citizens such as salaries, pensions and social security payments are done online. Bringing the rest under the digital platform will ensure higher transparency and accountability.
The committee is responsible for reviewing the existing state of digital payments in the country, identify gaps in the ecosystem and suggest ways to solve them.
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The committee is expected to submit its report in May. According to the report, some state governments are yet to adopt online payments and continue to use cash or cheques and this process has to change.
The RBI committee is also planning to recommend implementing online payments for government services such as rebates, returns and tax challans. The committee met to discuss gaps in the ecosystem and sought help from officials in the Ministry of Finance’s department of financial services and economic affairs, Department of Telecommunications, and Ministry of Electronics and Information Technology.
RBI’s Measures To Boost Digital Payments
In order to digitise payments in the country, the RBI has been recently taking several steps to eliminate fear and doubts from the minds of the users related to online payments.
Earlier this month, RBI governor Shaktikanta Das said that the central bank will come up with a regulatory framework of customer-protection measures tailor-made for digital transactions.
During RBI’s bi-monthly monetary policy review, Das added that the central bank proposes to set up a framework to improve turnaround time for resolution of customer complaints and compensation framework across all authorised payment systems.
In February, the bank regulator had also launched the ombudsman scheme for the online payments sector. Under this scheme, the regulator will redress user complaints and grievances related to online transactions.
Apart from this, the central bank has is also looking to support the fintech players in the country. Earlier this month, the bank regulator released a draft, ‘Enabling Framework for Regulatory Sandbox’ to allow the fintech startups to test within a regulatory testing environment.