RBI opposes Digital Payment Committee proposal to set up separate payments regulator

RBI opposes Digital Payment Committee proposal to set up separate payments regulator

The Reserve Bank of India (RBI) has opposed the view of Digital Payment Committee to establish a separate entity to regulate payments and settlements.In September, the Centre had set up a 11-member committee on Digital Payments headed by Finance Secretary Ratan Watal, and including the RBI’s

former deputy governor H.R. Khan and Executive Director Chandan Sinha as its members.The panel suggested changes in the regulatory mechanism under various acts such as the Payments and Settlement Act, the RBI Act, and the Information Technology Act among others. It recommended that RBI will be the regulator for SIPS (systemically important payment system) and a separate board (Payments Regulatory Board) for retail payments will be created under RBI.

iv. The committee had suggested that the PRB be an independent body. However, RBI said that SIPS and retail payment systems are under the central bank and there was no need to create confusion by artificially dividing the payment systems for bringing them under two sets of regulators.

v. The RBI has suggested a monetary-policy-committee-style structure for the PRB, where outcomes are decided independently, but implementation remains with the banking regulator.