 "Image via Shutterstock")
The finance ministry has set up a panel, led by former finance secretary Ratan Watal, to suggest steps to reduce cash transactions to promote card payments through incentives such as tax rebates and cash back schemes.
The 11-member high-level panel has been tasked with reviewing the payment system in the country and suggest measures for encouraging digital payments. The panel will suggest various measures to “incentivise transactions through cards and digital means, for example, through tax rebates/incentives, introduction of cash back/lottery,” the ministry in a notification on its website.
Other members of the panel include former Reserve Bank of India (RBI) deputy governor H R Khan, secretary, or a nominee, from the Department of Investment and Public Asset Management, heads of banking, technology and payments system industry bodies, and chairperson of the Central Board of Direct Taxes, among others. The panel has been asked to submit its report in one year.
The panel’s terms of reference include studying and suggesting changes to the regulatory mechanism under the Payment and Settlement System Act, RBI Act, Banking Regulation Act, Prevention of Money Laundering Act and other various laws.
The panel will also study the feasibility of creating a payments history of all card/digital payments and ensure that merchants/consumers can leverage the data to access “instant, low cost micro-credit” through digital means and create necessary linkage between the payment history and credit information.
Other terms of reference include, “To study and recommend ways for leveraging Unique Identification Number or any other proof of identity for authentication of card/digital transactions and setting up of a centralised KYC Registry.”
The committee will study the introduction of single window system of payment gateway to accept all types of cards/digital payments of government receipts and enable settlements via National Payments Corporation of India or other agencies within specified timelines.
Another task assigned to the panel is to identify regulatory bottlenecks and suggest changes. It will also look into the scope of integration of all government systems like Public Finance Management System, PayGov, Bharatkosh and eKuber.
The Union Cabinet had in February approved withdrawal of surcharge, service charge and convenience fee on card and digital payments. It also approved mandating payments beyond a prescribed threshold only through a card or digital mode.
The 11-member high-level panel has been tasked with reviewing the payment system in the country and suggest measures for encouraging digital payments. The panel will suggest various measures to “incentivise transactions through cards and digital means, for example, through tax rebates/incentives, introduction of cash back/lottery,” the ministry in a notification on its website.
Other members of the panel include former Reserve Bank of India (RBI) deputy governor H R Khan, secretary, or a nominee, from the Department of Investment and Public Asset Management, heads of banking, technology and payments system industry bodies, and chairperson of the Central Board of Direct Taxes, among others. The panel has been asked to submit its report in one year.
The panel’s terms of reference include studying and suggesting changes to the regulatory mechanism under the Payment and Settlement System Act, RBI Act, Banking Regulation Act, Prevention of Money Laundering Act and other various laws.
The panel will also study the feasibility of creating a payments history of all card/digital payments and ensure that merchants/consumers can leverage the data to access “instant, low cost micro-credit” through digital means and create necessary linkage between the payment history and credit information.
Other terms of reference include, “To study and recommend ways for leveraging Unique Identification Number or any other proof of identity for authentication of card/digital transactions and setting up of a centralised KYC Registry.”
The committee will study the introduction of single window system of payment gateway to accept all types of cards/digital payments of government receipts and enable settlements via National Payments Corporation of India or other agencies within specified timelines.
Another task assigned to the panel is to identify regulatory bottlenecks and suggest changes. It will also look into the scope of integration of all government systems like Public Finance Management System, PayGov, Bharatkosh and eKuber.
The Union Cabinet had in February approved withdrawal of surcharge, service charge and convenience fee on card and digital payments. It also approved mandating payments beyond a prescribed threshold only through a card or digital mode.
