24X7 NEFT transactions: What the Watal Committee recommends for a cashless India

Here is a list of the suggested recommendations

An 11-member committee was set up on August 23 this year under India's former finance secretary Ratan Watal. The committee was supposed to prepare a report within a period of one year and suggest ways of promoting digital transactions in the country.

On December 9, the Watal Committee submitted its report to Finance Minister Arun Jaitley. 

With the government looking to move towards a cashless economy by promoting digital transactions following demonetisation of high-value denomination notes, these recommendations may be crucial in terms of changing the economic landscape of the country. Here is a list of suggested recommendations:

• An independent payments regulator-the Payments Regulatory Board (PRB)- within the framework of the Reserve Bank of India (RBI)

• Similar treatment for banks and non-banking entities in the payments space

• Inclusion of consumer protection, data protection and privacy clauses in the existing Payment and Settlements Act. This will help users approach the regulator in cases of unauthorised and fraudulent transactions. 

• Aadhaar-based e-KYC to replace all existing central KYC processes. The panel has sought to make the Adhaar number central to all transactions. 

• 24X7 operation of  real-time gross settlement system (RTGS) and national electronic funds transfer (NEFT) banking services

• Allowing non-bank payment service providers to have direct access to payment systems

• Interoperability between banks and payment service providers to be regulated by RBI 

• Increase funds to promote digital payments

• Levying a cash-handling charge to disincentivise cash transactions

• All government payments to be made online. It has also suggested waiving customs and excise duty on parts used in micro-ATMs and point of sale machines.

A timeline of one to three months has been set for the government to implement most of the recommendations of the panel.