Vision 2018- RBI on the future of Payment Systems in India

Reserve Bank of India has revised its Vision document on Payment and Settlement Systems for 2012-2015 and issued a new document titled Vision-2018 which incorporates some important guidelines to be followed by all stake holders.

The Vision-2018 professes to revolve around the 5Cs namely

  1. Coverage
  2. Convenience
  3. Confidence
  4. Convergence and
  5. Cost

The vision will focus on 4 strategic initiatives namely

1.Responsive Regulation

2.Robust infrastructure

3. Effective Supervision and

4.Customer Centricity

The Vision-2018 document reiterates the commitment of the RBI to encourage greater use of electronic payments by all sections of society so as to achieve a “Less Cash Society”.

Through the document, RBI has stated its commitment that

i. RBI, in consultation with all the Stakeholders will create a regulatory framework to promote the twin objectives of enhanced coverage with interoperability and convenience with security.

ii. Building a robust payment infrastructure will be a key objective.

iii.The document will focus on effectiveness of supervisory mechanisms, and augmenting the data reporting and fraud monitoring systems.

iv. The vision will adopt a “Customer Centric” approach to streamline the customer grievance redressal mechanism, focus on building customer awareness and education and initiate customer protection measures.

The document also says that towards achieving these objectives, new policies will be framed.

The document also provides some detailed exposition of the vision.

One of the new initiatives proposed is that Payment Gateway Service Providers and Payment Aggregators who are presently being monitored indirectly may be revised and the indication is that they may be brought under direct regulations. Further, RBI intends to introduce penalties for non adherence to its guidelines.

To strengthen the confidence in the payment systems and to minimize instances of frauds, RBI is expected to develop a framework for collection of data on frauds in consultation with the industry.

One of the areas where improvements are expected to be introduced is in the area of grievance redressal systems. RBI in collaboration with all the stakeholders is expected to undertake customer awareness through structured Electronic Bannking Awareness and Training programs.

RBI also indicates that it will encourage payment system providers (which includes NEFT and RTGS) to adopt best practices for protecting customer interest by putting in place robust fraud and risk monitoring systems. Additionally, a regulatory framework to limit the customer liability in case of unauthorized transactions would also be put in place.

The detailed vision document is available here.

While the intentions behind the vision document is welcome, RBI has always been weak in implementing its own policies and lets the Banks dictate the policies through the IBA. Let us hope that  there will be a difference this time.

Naavi

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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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