With a view to encourage digitisation of payments and enhance financial inclusion through digitisation, the Reserve Bank of India has decided to constitute a five-member committee named ‘High-Level Committee for Deepening of Digital Payments”.
The new committee will be led by former chairman, Unique Identification Authority of India, Nandan Nilekani. The other members of the committee include:
- H.R. Khan, former deputy governor, Reserve Bank of India
- Kishore Sansi, former managing director and chief executive officer, Vijaya Bank
- Aruna Sharma, former secretary, Ministry of Information Technology and Steel
- Sanjay Jain, chief innovation officer, Center for Innovation, Incubation & Entrepreneurship (CIIE), IIM Ahmedabad
The committee will look to review the existing status of digitisation of payments in the country, identify the current gaps in the ecosystem and suggest ways to bridge them.
As stated by RBI, “The committee aims to assess the current levels of digital payments in financial inclusion and to undertake cross country analyses with a view to identifying best practices that can be adopted in the country to accelerate digitisation of the economy and financial inclusion through greater use of digital payments.”
Further, it is required to suggest measures to strengthen the safety and security of digital payments and will provide a road map for increasing customer confidence and trust while accessing financial services through digital modes.
The committee shall submit its report within a period of 90 days from the date of its first meeting.
Niti Aayog in its August 2018 report — Digital Payments – Trends, Issues and Opportunities expects the industry to grow $1 Tn by 2023. Also, The government’s digital payments system, Unified Payments Interface (UPI), announced a blockbuster ending to 2018, recording more than 620 Mn transactions in December. This took the total number of digital payment transactions on the UPI platform in the year to 3 Bn.
However, as Himaghna Dey Sarkar, the chief expansion officer at ToneTag, highlighted in one of his articles on Inc42, in spite of a major breakthrough in digital payments post demonetisation, the cash in circulation as of June 22, 2018, was only 9.8% more than it was on June 23 in 2017.
To promote and regulate digital payments efficiently, a seven-member inter-ministerial committee, led by Subhash Chandra Garg, the secretary, Department of Economic Affairs (DEA), had earlier recommended making Payments Regulatory Board independent of RBI. The draft Payments and Settlement Systems Act (Amendment) is still pending with the government.