The Reserve Bank of India(RBI) appointed 5-member panel led by Nandan Nilekani recommended measures like 24×7 Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) facility, duty-free import of Point-of-sales(POS) machines and elimination of all charges in order to promote digital payments in India. Policy recommendations were made to all major regulators such as RBI, Securities and Exchange Board of India (SEBI) , Insurance Regulatory and Development Authority of India (IRDAI) and Department of Telecommunications (DoT) with the objective to reduce cash based payments.
Major Recommendations:
- The panel recommended that there should be no convenience fee on payments made to government agencies by customers and suggested payment systems to use machine driven online dispute resolution systems to handle complaints.
- It recommended an appropriate mechanism to monitor the digital payment systemsand make aggregated information based on blocks, and PIN code available to all players on a monthly basis to facilitate necessary adjustments.
- Merchant Discount Rate (MDR) and interchange fees should be determined by the market.
- The Interchange on card payments should be reduced by 15 basis points (0.15%) which will increase the incentive for acquirers to sign up merchants.
- The current import duty of 18% on POS machines should be reduced to Nil for a period of 3 years to facilitate adequate expansion of acquiring infrastructure in the country.
- Internationalization plan for Indian Payment Systems such as RuPay and Bharat Interface for Money (BHIM) Unified Payments Interface (UPI) to ease remittances into India and to help Indian travelers make payments abroad was suggested.
- The government should continue the current scheme to refund the Merchant Discount Rate (MDR) for small value transactions (under Rs 2,000) beyond December 2019 for another 2 years.
- It recommended large scale usage of common and interoperable mobility cards by public across different transit options.
About Reserve Bank Of India:
♦ Headquarters: Mumbai
♦ Governor: Shaktikanta Das
♦ Deputy Governors: BP Kanungo, N S Vishwanathan, Viral Acharya and Mahesh Kumar Jain