Fintech: The panel said there should not be any discrimination between banks and non-banking companies.
Digital India: A high-level panel constituted by the Union government has blamed the lack of a level playing field and discriminatory regulatory barriers for the high level of cash in the system and low penetration of digital payments in the country. Despite the rapid growth of digital payments still, there is a lot of cash in the system and to realise the full potential of digital payments technologies, a level playing field needs to be created among the banks and non-banking players, the panel said in its report submitted to finance minister Nirmala Sitharaman on Monday.
“The National Payment Corporation of India may provide non-discriminatory access to fintech firms and other financial firms that are not currently shareholders of the NPCI,” the panel led by economic affairs secretary said in its report.
It said that restrictions on non-banking companies to access to payment infrastructure, such as AEPS, needs to be re-evaluated.
Lamenting the different treatment given to different sectors like banks and non-banking companies, the panel said these discriminatory regulatory barriers must end to boost the use of digital payment technologies.
“The Committee is of the view that non-discriminatory access must be the norm unless the respective regulator clearly provides reasons for a separate treatment to a specified category of financial firms,” the panel said.
In its annual report released last month, the RBI has admitted that there was 17% more cash in the system than what was there before demonetisation in November 2016.
In March 2018, the Modi government has constituted a high level panel under the chairmanship of economic affairs secretary to assess the entire landscape of fintech eco-system in the country and make recommendations to boost digital payments.
Secretaries of ministry of electronics and information technology, department of financial services, ministry of micro and small and medium industries, revenue secretary Ajay Bhushan Pandey who is also the CEO of UIDAI, deputy governor of RBI, CBIC Chairman, executive director of SEBI and Deepak Bagla, CEO of Invest India were other members of the panel.
Talking about the need for early establishment of a Payment and Settlement Board, it said the calibrated liberalisation should continue till then to make digital payments as the primary mode of payment, and to encourage competition among various service providers.