Why the govt and RBI are at odds over setting up a payments regulator

Creation of another regulator for payments has its own challenges, especially lack of expertise. Such a body can also become playground for senior bureaucrats looking for sinecures post retirement

On October 19, the Reserve Bank of India released an unusual press release. The press release was a dissent note on a draft report submitted by an inter-ministerial committee. The committee had made recommendations regarding the setting up of an independent Payments Regulatory Board (PRB) and various facets related to such a regulatory body. The RBI’s strong dissent note parsed through the committee’s recommendations and brought out a point-by-point counter view.

The main points of contention between the RBI and the committee’s recommendations were:

1. PRB to be an independent regulator
2. Need to have non banks get access to and participate