Payment System Bill on cards

The Reserve Bank of India (RBI) today said it is working with the Centre to draft a comprehensive legislation on payment system.

The Payment System Bill will give the apex bank powers to form regulations for the payment industry, RB Barman, executive director, RBI, said on the sidelines of a seminar on payment systems in banks.

RBI has also asked banks to develop an integrated architecture to cater to the needs of the payment system and ensure greater customer satisfaction.

"Banks need to also reduce intra-operability charges for customers," said Barman. Intra-operability charges for automated teller machines (ATMs) is as high as Rs 40. Banks need to justify high prices in a competitive market.

"Banks also need to offer technology-led services in rural areas as well, which will enable rural masses to access internet banking facility," he added.

The regulator is planning to introduce T+0 settlement for electronic clearing system in Mumbai by mid-August, he said. Currently, bulk cash settlements for payment of dividend warrants and corporate salary payments take two days (T+2).

The implementation of cheque truncation has been advanced to March 2006. It will be introduced in the National Capital Region (NCR) by March 2006, following which it will be rolled out in Mumbai, Chennai and Kolkata, said Barman.

On real-time gross settlement (RTGS), Barman said that 10,000 bank branches will be covered under the RTGS network by March 2005. At present, around 4,934 bank branches are under RTGS.