RBI aims to develop more efficient, integrated payment system

The Reserve Bank aims to develop a more efficient and integrated payment system in the country.

In its 'Payment Systems In India: Vision 2012-15' document, RBI said the main focus is to provide a modern electronic payments system that is safe, simple and low-cost for use by all.

"Payment systems will be driven by customer demands of convenience ease of use and access...In innovative e-payment products and capabilities," the RBI document said.

The regulatory policy stance will be oriented towards promoting a less cash/less paper society, it said.

RBI said it is to be achieved by nurturing a payment system that adequately serves the national and international transaction needs of the country.

The payment system initiatives taken over 2009-2012 have resulted in deeper acceptance and penetration of modern electronic payment system, it said.

Though cheque is still a dominant mode of payment, its share has come down from 65% to 52% in volume terms from 12% to 9% in value terms.

Payments in non-cash payments have shown an upward trend with electronic payments by the end of 2011-12, constituting 91% in terms of value (from 88% in 2009-10) and 48% in terms of volume (from 35% in 2009-10).

"Notwithstanding these accomplishments, cash remains the predominant payment mode in the country...The value of banknotes and coins in circulation as a percentage of GDP (12.04%) is very high in the country when compared to other emerging markets, like Brazil, Mexico and Russia," RBI said.

Likewise, non-cash transactions per citizen is very low in India (six transactions per inhabitant) when compared with other emerging markets.

The electronic payment products and services is concentrated to a large extent in the tier-I and tier-II areas and mostly to people having access to formal banking channels.

However, the section of unbanked and under-banked population in the country have missed the bandwagon of modern electronic payments system.

"The use of electronic payment instruments allows the unbanked to start building a transaction history, which can be a step towards initiating them towards financial inclusion."

The modern electronic payment systems will also meet the payment needs such as remittances under the overall ambit of financial inclusion, RBI added further.