Ratan P. Watal Committee on Digital Payments

Introduction 

• The Committee on Digital Payments constituted by the Ministry of Finance, Department of Economic Affairs under the Chairmanship of Shri. Ratan P. Watal, Principal Advisor, NITI Aayog and former Finance Secretary to the Government of India to review the payment systems in the country and to recommend appropriate measures for encouraging Digital Payments. 

Term of Reference 

•  To study and recommend need for charges, if any, in the regulatory mechanism and any legislation, relevant for the purpose of promotion of payments by digital modes 

• To study and recommend ways for leveraging Unique Identification Number or any other proof of identity for authentication of card/digital transactions and setting up of a Centralised KYC Registry;
  
• To study introduction of single window system of Payment Gateway to accept all types of Cards/ Digital Payments of Government receipts;
  
•  To study global best practices in payments including initiatives taken by various Governments/ Government Agencies.
  
•  To identify regulatory bottlenecks, if any, and suggest changes to promote payment by card/ digital means. 

Recommendations 

• It recommended for a medium term strategy for accelerating growth of Digital Payments in India with a regulatory regime which is conducive to bridging the Digital divide by promoting competition, open access & interoperability in payments.
  
• It also recommends inclusion of financially and socially excluded groups and assimilation of emerging technologies in the market.
  
• It calls for need of safeguarding security of Digital Transactions and providing level playing to all stakeholders and new players who will enter this new transaction space.
  
•  It has suggested inter-operability of payments system between banks and non-banks, up-gradation of digital payment infrastructure and institutions.
  
• It also recommends a framework to reward innovations for leading efforts in enabling digital payments.
  
•  Make regulation of payments independent from the function of central banking.
  
•  Promote digital payments and receipts within Government.
  
•  Create a fund proposed as DIPAYAN from savings generated from cash-less transactions to expand digital payments.
  
•  Consider outsourcing the function of operation of payment systems like Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT).
  
•  Greater use of Aadhaar and mobile numbers for making digital payments as easy as cash.
  
• Give Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) independent statutory status within overall structure of RBI.
  
• Called for amendments to the Payments and Settlement Systems Act, 2007 to provide BPSS explicit mandate for competition and innovation, consumer protection, open access and interoperability, regulations on systemic risks and data protection.
  
• Providing disincentives for usage of cash Creating awareness and transparency on cost of cash.