multiple cards in the same nfc handset. further, use of nfc would require changes in payment processing, upgrading the pos terminals at the merchant ends. liberalised business correspondent ( bc ) guidelines : bc guidelines have been significantly liberalised with corporates including mnos having been allowed to come in as bcs. the banks are also now permitted to pay a reasonable commission / fee to the bc. it is hoped that these liberalised guidelines would result in expansion of the banking coverage and along with technology provide a sustainable ecosystem for the unbanked and financially excluded segments of the population to be part of formal banking network. aadhaar enabled payment system : npci and uidai in partnership are ushering in the aadhaar enabled payment system ( aeps ). aeps is a bank led model which allows online financial inclusion transaction at pos ( microatm using handheld device ) through the business correspondent of a bank using the aadhaar authentication. at present aeps service can be availed by customers at their respective bank business correspondent outlets. aeps will support four types of banking services viz. balance enquiry, cash withdrawal, cash information note to the press ( press release no. 45 / 2011 ), telecom regulatory authority of india. bis central bankers ’ speeches deposit and aadhaar to aadhaar funds transfers. uidai along with npci has piloted aadhaar enabled payment system in jharkhand. basic transactions permissible over these accounts include cash deposit, cash withdrawal, balance enquiry, and inter - bank money transfer. this system also envisages the creation of an aadhaar enabled payment bridge which would facilitate direct disbursement of government benefits to the beneficiary by credit to their bank accounts using aadhaar. section 6 : industry level challenges convergence of products and channels – competition, technology, increased customer demand for comfort and convenience and regulatory initiatives have resulted in introduction of several payment products and channels over the time. however, banks have built these products and channels into separate silos and vertical. the cii - pwc survey “ payment business in indian banks ” brought out this issue of separate silos and lack of interoperability among these silos. for instance, in some banks the core banking system is usually different from the card processing system. the survey also highlights the issues that arise from disparate payment infrastructure for banks such as duplicity in work, lack of scalability, lack of stp, increase

of various markets, the changes in the retail payments are aimed at providing efficient and timely payment mechanisms to the citizens of this country. the payment system also assumes importance in the context of domestic financial sector reforms and global financial integration that the country is undergoing currently. foreign investments ( direct and portfolio ) are encouraged by the availability of an efficient payments system, as also the need for a low cost remittance facility for migrants to send money to their kith and kin within the country. improved, faster and cheaper domestic money transfers through the payments system is also a part of the emerging scenario. given this scenario, let me through the remainder of this address devote myself to providing a bird ’ s eye - view of the current payment system landscape in the country ; the other significant initiatives that have been undertaken ; the game changers that would provide further fillip to this endeavour ; identifying the potential goldmine as it were for deepening this process ; the enablers to take this process forward ; the challenges faced at the industry level ; the role of the regulatory framework which could serve as a catalyst ; and conclude with what i would call the 5 a ’ s of payment systems for providing an efficient, robust, safe, costeffective payment services to our fellow citizens. bis central bankers ’ speeches section 1 : payment system landscape in india the stage of payment system development in a country to a large extent depends upon the adoption of technology, introduction of new payment instruments and the confidence of the public in using these payment instruments. in india cash still continues to be the predominant payment mode. this can be gauged from the fact that value of bank notes and coins in circulation as a percentage of narrow money is very high at 60. 07 % for the year 2009 – 20101, when compared to other emerging economies like south africa ( 18. 51 % ), china ( 18. 83 % ), mexico ( 39. 14 % ). brazil comes close to india with 52. 70 % of the value of banknotes and coins in circulation as a percentage of narrow money. this is perhaps a pointer that we have been relatively slow in embracing cashless payment modes and using them as cash substitute. the pre - dominant use of cash could also be attributed to the fact that the process for adoption of non - cash mode of payments started relatively late in the country. notwithstanding this, the reserve bank has been in the forefront both as operator and facilitator for promoting the use of cashless payment instruments in the country