The Reserve Bank of India (RBI) has invited feedback from the public on the various changes proposed in the payments system, including the possibility of imposing tiered charges on transactions done through the Unified Payments Interface (UPI).
As announced in the Statement on Developmental and Regulatory Policies dated December 08, 2021, the Reserve Bank of India (RBI) has released a discussion paper on “Charges in Payment Systems” for public feedback, RBI said in a statement. The discussion paper was released on 17th August.
Feedback may be provided in respect of questions raised therein, including other relevant suggestions, through email on or before October 3, 2022, the RBI said.
The focus of RBI’s initiatives in the payment systems has been to ease frictions which may arise from systemic, procedural or revenue-related issues. While there are many intermediaries in the payments transaction chain, consumer complaints are generally about high and non-transparent charges.
Charges for payment services should be reasonable and competitively determined for users while also providing an optimal revenue stream for the intermediaries. To ensure this balance, it was considered useful to carry out a comprehensive review of the various charges levied in the payment systems by highlighting different dimensions and seeking stakeholder feedback.
The discussion paper covers all aspects relating to charges in payment systems [such as Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI)] and various payment instruments [such as debit cards, credit cards and Prepaid Payment Instruments (PPIs)], etc.
In India, the RTGS and NEFT payment systems are owned and operated by RBI. Systems like IMPS, RuPay, UPI, etc, are owned and operated by the National Payments Corporation of India (NPCI), which is a not-for-profit entity promoted by banks. The other entities like card networks, PPI issuers, etc, are profit-maximising private entities.
“The feedback received would be used to guide policies and intervention strategies,” the RBI said in a statement.
The discussion paper outlines existing rules and manner of charges levied in payment systems and presents other options through which such charges could be levied. The intent is to present various issues involved in an unbiased manner and to seek feedback on a set of questions that emanate therefrom.
“Based on the feedback received, RBI would endeavour to structure its policies and streamline the framework of charges for different payment services/activities in the country. At this stage, it is reiterated that RBI has neither taken any view nor has any specific opinion on the issues raised in this discussion paper,” the RBI noted in the discussion paper.