Committee on Digital Payments headed by Ratan P. Watal in Dec 2016 submitted its report to the Union Ministry of Finance.
The committee was formed by the Union Government to suggest measures to increase digital financial transactions across the nation.
It has said that regulation of payments should be independent from the RBI.
The Payments and Settlement Systems Act 2007 was also updated.
The committee stresses on promoting digital payments and receipts within the Government.
The committee also created a fund proposed as DIPAYAN from savings generated from cashless transactions.
It also recommended a ranking and reward framework to encourage and recognise government agencies who lead the efforts on enabling digital payments.
It asked the government to consider outsourcing the operations of payment systems like Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT).
It also recommended to upgrade payment systems like RTGS and NEFT to operate on a 24x7 basis in the due course of time.
It aimed to allow non-bank payment service providers (PSPs) to directly access payment systems.
National Payments Corporation of India (NPCI) should be made payments centric in its ownership and objectives.
Payments to be made inter-operable between bank and non-banks as well as within non-banks.
A formal mechanism will be created to enable innovations and new business models and implement other measures to promote digital payments.
In addition to the above recommendations, the committee also suggested other measures to promote digital payments including
- Promoting Aadhaar based eKYC and paperless authentication
- Providing disincentives for usage of cash
- Creating awareness and transparency on cost of cash
About the Watal Committee
- Chairman: Ratan P. Watal
- Formed: 23rd Aug 2016
- 11 member committee
- Headed by Watal, the principal advisor to the NITI Aayog and the former finance secretary.
- Committee was asked to review the Payment and Settlement System Act, 2007, the Reserve Bank of India Act, 1934 and Information Technology Act, 2000.
