The Reserve Bank of India posted a dissent note on public domain, regarding certain recommendations on changes to payment and settlement laws. An Inter-Ministerial Committee for finalization of amendments to the Payment & Settlement Systems Act, 2007 was formed by the Government under the chairmanship of Secretary, Department of Economic Affairs.
RBI note, authored by Jose J. Kattoor, Chief General Manager, said: “Payment systems are a sub-set of currency which is regulated by the RBI. The overarching impact of Monetary policy on payment and settlement systems and vice versa provides support for regulation of payment systems to be with the monetary authority.”
On regards to the Payments Regulatory Board (PRB) to be an independent regulator, RBI said, “There is no case of having a regulator for payment systems outside the RBI.” RBI also added, “The composition of the PRB is not in conformity with the announcements made in the Finance Bill by the Finance Minister.”
RBI note also stated, “There has been no evidence of any inefficiency in payment systems of India. The digital payments have made good and steady progress. India is gaining international recognition as a leader in payment systems. Given this, there need not be any change in a well-functioning system.”
“The Payments Regulatory Board (PRB) must remain with the Reserve Bank and headed by the Governor, Reserve Bank of India. It may comprise 3 members nominated by the Government and RBI respectively, with a casting vote for the Governor to ensure smooth operations of the Board. The composition of the PRB is also not in conformity with the announcements made in the Finance Bill by the Honorable Finance Minister.” RBI said.