RBI Annual Report for Review of Payment System
The Reserve Bank of India (RBI) will conduct an annual review of the payment and settlement systems to ensure that customers receive timely, cheap and dependable service.
The first review is proposed for the year-ended March 31, 2007. Business Standard reports that the review will be based on parameters like timeliness of customer service, cost of operation, service charges and the overall impact on the financial system.
RBIs Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) will give directions and set standards for payment and settlement systems.
The board is to study payment systems in select countries, prepare a road map for moving from paper-based products to electronic payment systems and promote card-based payments as one of the strategies for increasing the use of electronic payments.
The board has recommended exploring the option of setting up a low cost cross-border remittance system with neighbouring countries, especially Nepal, and also proposed an assessment of the real time gross settlement (RTGS) system and bringing all RTGS-enabled branches under the national electronic funds transfer (NEFT) system.
The suggestions include looking at the feasibility of a couple of large banks providing associate memberships to smaller banks to participate in the cheque truncation system.
While, the RBI had rejected the panel’s suggestion to levy a charge on cheques, the other recommendations for incentivising electronic payment systems are being considered by the RBI.
The annual turnover, in value terms, in the various payment and settlement systems rose 37.5 per cent to Rs 4,23,74,063 crore in 2006-07 from Rs 3,08,15,285 crore in 2006.