For records we may say that RBI has sought public comments on its draft circular for revising MDR charges downwards as a part of the follow up on Watal Committee report implementation. A copy of the draft circular is available here.
According to the notification issued in this regard dated 16th February 2017 comments/ suggestions/ feedback, if any, may be sent by post to the Chief General Manager, Department of Payment and Settlement Systems, Reserve Bank of India, Central Office Building, 14th Floor, Shahid Bhagat Singh Road, Mumbai – 400 001, or by e mail to email@example.com on or before February 28, 2017.
It has been pointed out in the case of the draft circular of August 11, 2016 regarding “Limited Liability of Customers on unauthorized transactions”,RBI issued the draft circular for public comments upto August 31, 2016, obtained the comments and then went silent.
Despite all forms of nudging, RBI continues to remain silent to the day and has not implemented the draft circular nor has made public the comments received. In RTI applications, RBI has stated that it is still evaluating the public responses even after 8 months and is apparently lying to the public that it is desirous of implementing the circular because Banks donot want it.
The Finance Minister and PMO are also remaining silent on the representations about the non implementation of the August 11 circular.
This incident has proved that RBI is in the habit of issuing draft circulars for public comments without any intention of taking action based on such comments if the other stake holders namely Banks are not in agreement. The calling for public comments appears to be a farce.
It could perhaps be a strategy to kill a move pushed by some RBI executives who falsely believe that RBI is an organization with a mandate to safeguard the interest of the Banking public in India and not a promotional agency for promoting the share holder interests of Banks!
Under the circumstances, the draft circular on MDR charges may also be an eye-wash and RBI may not implement any reduction of MDR charges if Banks oppose the same. The underlying fact is that RBI is no longer regulating the Banks. It is the Banks and the IBA which is manipulating the policies that come out through RBI.
Despite a few individuals in RBI who have the intention of doing good to people and succeed from time to time to persuade the policy makers to move towards making some consumer oriented changes, their efforts are scuttled by issuing such draft circulars which are later buried without follow up.
I wish Mr Urjit Patel proves me wrong.