Digital push needs caution

The RBI should take note of some critical lacunae

The Reserve Bank of India’s (RBI’s) Payment Vision 2025 document, read in conjunction with a recent letter clarifying rules for prepaid payment instruments (PPI), indicates both its policy targets and also its regulatory concern. The Vision is to enable rapid growth in digital payments and reduce cash use, with clearly defined targets. The regulator, the letter seems to suggest, is worried that the rapid growth of PPI, loaded through non-banking debt channels, could lead to a bubble, and is putting safeguards in place, even at the cost of adversely affecting the fintech model. 

The letter forbids the loading of balance on