Lok Sabha Question No. 5627 (UNSTARRED), answered on 2017-04-07
Subject: Payments Regulatory Board
Ministry: FINANCE
Asked by: POONAMBEN HEMATBHAI MAADAM

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 5627

TO BE ANSWERED ON 7 TH  APRIL, 2017/ CHAITRA 17, 1939 (SAKA)

## PAYMENTS REGULATORY BOARD QUESTION

## 5627. SHRIMATI POONAMBEN MAADAM:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has any proposal to set up a new Payments Regulatory Board in the Reserve Bank of India to catalyse faster adoption of digital finance in the country;
- (b) if so, the details thereof along with its aims and objectives; and
- (c) the  strategies  and  measures  adopted  by  the  Government  to  enhance  digital transactions for 2017-18 through various electronic payments?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL)

- (a) & ( b ) :      The Government of India constituted a Committee under Shri Ratan P. Watal to review the framework related to Digital Payments. The Committee has recommended structural reforms in the payment eco system, including amendments to the Payment and Settlement Systems Act, 2007. The modalities for creating a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems have been included in the Finance Bill, 2017.
- (c): To incentivize the States/UTs for promotion of digital transactions, it was decided that Central assistance of Rs. 50 crore would be provided to the districts for undertaking Information, Education and Communication (IEC) activities to bring 5 crore Jan Dhan accounts to digital platform. The fund allocation is based on proportion of Jan Dhan accounts of all States/UTs. Under the scheme an incentive @ Rs. 10/- is provided for every individual who has transited to digital payment mode and undertaken at least two successful transactions by any of the five digital payments modes viz: UPI, Rupay / Debit / Credit / Prepaid Cards, AEPS, USSD and E-Wallets. NITI Aayog has so far released an amount of Rs 15.06 crore to 533 Districts as first instalment.

In addition to above following measures were also taken to promote less cash payment:

-  In order to facilitate wider acceptance of card payments, the following special measures for debit card transactions (including for payments made to Government) has been introduced for a temporary period between January1, 2017, till the issuance of final instructions on Merchant Discount Rate(MDR) for debt card transactions;
-  For transactions upto ₹ 1000/-, MDR has been capped at 0.25% of the transaction value.
-  For transactions above ₹ 1000/- and upto ₹2000/-, MDR has been capped at 0.5% of the transaction value.
-  Department of Payment and Settlement Systems (DPSS), Reserve Bank of India (RBI) has recently taken the following measures to promote digital transactions in the country:-
-  In-principle approval given to NPCI for launching the Pilot of National Electronic Toll Collection (NETC) system for facilitating electronification of toll payments.
-  NPCI has been accorded permission to go live for Unified Payments Interface (UPI).
-  NPCI has also been given in-principle approval to launch the common app for UPI (BHIM) and also introduce USSD 2.0 which will be integrated with UPI for carrying out mobile banking payments using any type of handsets by registered customers.
-  In-principle approval given to National Payments Corporation of India (NPCI) for launching the Common App for enabling Aadhaar-based merchant payments (Aadhaar Pay).
-  All authorised card networks have been advised in September 2016 to standardise the QR code so that interoperability of transactions using this mechanism is possible. This interoperable  QR (Quick Response) Code (Bharat QR) was launched on February 20, 2017.
-  Customer  convenience  enhanced  through  rationalisation  of  mandate  for  additional factor  of  authentication  for  card  not  present  transactions  using  network  provided solutions.
-  For facilitating interoperable bill payments in the country, the Bharat Bill Payment System (BBPS), NPCI has been given in-principle authorisation to act as Bharat Bill Payment Central Unit (BBPCU).