'With expansion of payment ecosystem, legal changes needed'

A top official of State Bank of India today said with the expansion of payment ecosystem, there is a need for some amendments in the provisions for payments under the Negotiable Instruments Act.
"Some regulatory and legislative changes are required in view of the emerging payment ecosystem. Presently, most of the provisions of payments are drawn from Negotiable Instruments Act which is going to gradually lose utility in future," SBI's Managing Director Rajnish Kumar said here.
The bank has raised the issue with the Reserve Bank, he added.
Kumar, who was present at the launch of National Payments Corporation of India's Unified Payments Interface (UPI), said SBI is committed to making the payment system successful.

"We are an integral part of the payment system in the country, being the largest bank. We are already working on a state-of-the-art application which will be integrated with the UPI," Kumar said.
He, however, said there is a need to ensure that these transactions are flawless, without failure, and in the case of a failed transaction there should be auto reversal of money.

The number of daily ATM transactions in India was very high and if the failure rate shot up, the banks would find it difficult to handle customer complaints, he said.
"At the end of the day, I can auto reverse my (SBI's failed) transactions, but that is not the case when other banks are involved," Kumar said.

Recently, Bhattacharya had said that retail loans to GDP
in the country are at less than 10 per cent, which is one of the lowest among the emerging markets.
She had said: "I think we have still a lot of uncovered space in retail segment to grow. The median age in India is 26.5. So, obviously these are people who need these loans in order to fulfil their very many aspirations.
"I think what is being done now is to fulfil an unmet demand. I don't think we are in bubble territory as yet as long as we continue to maintain our good underwriting standards and also get the help of digital which will enable us to have even better picture."

Former RBI governor Raghuram Rajan had raised concerns about lenders, especially state-run banks, shunning project loans and aggressively targeting retail loans.
Bhattacharya said growth numbers of retail segment which she sees at SBI or other peers and NBFCs do not show any major stresses build-up.
"It is just that it is the role of the regulator to look at all areas where there is rapid growth to ensure that there isn't been something wrong that has been building up.
"That is the role of the regulator," she added.
With the pay commission awards coming into the system and the festive season kicking in, she said she expects good traction in the retail space.