RBI deputy governor HR Khan on Wednesday said RBI has some concerns over e-commerce transactions and will be coming out with some guidelines on the same.
“There are some issues which we are trying to look at. E-commerce is innovative and we cannot push away, so we will see….we are looking at coming out with some guidelines on it,” Khan told reporters on the sidelines of an NPCI event. He, however, did not elaborate what the specific concerns of the regulator are. In August, RBI had found that US-based taxi aggregator Uber was flouting payments norms and had asked it to comply by October 31, for which the company had sought more time.
Uber was following its practice that falls short of the two-step user authentication norms as laid out by RBI.
The concerns voiced by the senior RBI official come within days of commerce minister Nirmala Sitharaman saying the department was “watching” the developments in the fledgling space including some cases involving e-commerce majors in the courts over the market model.
It also comes after traditional brick-and-mortar traders approached the fair trade watchdog CII in this regard. Khan said RBI will come out with final guidelines on trade receivables discounting system, a draft of which was issued in July.
“We expect it is going to be a big game changer for the receivables of small and medium industry. We are going to put the guidelines and the application will be invited by middle of February,” he added. Under the guidelines, both factoring and reverse factoring will be allowed, he said.
On the foreign investors’ caps in the government securities, Khan said the increase will come in a phased manner.
When asked about the Budget announcement of bond buybacks to extend the maturity and reduce repayment burdens, Khan did not give an exact timeline or quantum of the mop-up and limited to saying that it will be done by March 2015. On the recently issued guidelines for the establishment of the payment banks and small finance banks, he said the new banks will not be a threat to existing banks but may increase competition.
CAD at reasonably comfortable level
RBI is “reasonably comfortable” with the current account deficit because of lower oil prices, deputy governor HR Khan said on Wednesday, after the government last week unexpectedly eased some rules on gold imports.
“We are reasonably comfortable from the current account point of view because of oil,” Khan told reporters. “So taking all that into account, a view has been taken that we’ll give up this 80:20 (rule on gold imports),” he said. The government on Friday scrapped a rule mandating traders to export 20% of all gold imported into the country in what had been known as the 80:20 rule. India will soon announce the current account deficit for the July-September quarter.
Steps on gold after studying 80:20 effect
RBI will closely study the impact of scrapping of 80:20 rule on gold imports before deciding on others measures to curb the demand for the precious metal, said deputy governor HR Khan.
His comments came a day after RBI governor Raghuram Rajan hinted that the government may change duty structure for gold.
Replying to a query whether RBI may look at other measures to curb gold demand, Khan said, “We will see going forward how it (scraping of 80:20 gold import rule) is happening.”
Declining oil price was was also one of the reasons for lifting 80:20 restriction on gold imports, he added.
The 80:20 rule had made it mandatory for importers to make value addition and then export a 20% of their imports, to partially offset the forex outgo.
After the monetary policy review, Rajan had said that enough room had been created after the slide in crude prices.
Rajan had said the “government decided that it was probably the best decision at this point to scrap this rule”, adding there are some requests to change the duty structure and that government will view and take a decision on it.
He had also said that the move to do away with the restrictions, which created certain distortions, was a “reasonable” one.