Loading ...Reserve Bank of India has published Annual Review (FY 2007) of Payment and Settlement Systems. It’s encouraging to read that RBI is taking some concrete steps to increase the penetration of electronic payments. I specially found Chapter 2 and 4 of this report interesting.
Some interesting observations:
- Electronic Bill Payment ( for utilities ) has increased 9x in volume and 11x in Amount since FY 2003-07 – It would be interesting to know the reasons behind this increase when other Use Cases hasn’t grown that much. Is it convenience?
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According to the survey – Cost and Awareness are two significant factors hampering the growth of electronic payments. Interestingly, electronic payment infrastructure doesn’t seem to be an issue, at least in Metros
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Report makes a good case of widespread use of NEFT for small payments which is still dominated by Cheque – especially because cheques put a cost on the bank and users.
Comments/Feedback/Critical Assessment on the report?
Hey Mukul,
Considering money as negotiable instrument and also argument (Ref 6.11) “instruments for micro payments is not cost effective”.
There are certain consideration for payment systems and efficient strengthening of Indian economy (internally).
* Maintaining maximum transactions and negligible (or negotiable) payment charges. Yes, it is solvable
(REF 4.24) by enabling RTGS/NEFT having explicitly
different network with competitive advantage (to ease bank’s queries about payment systems).
* Security is one aspect but efficiency and structuring
in Indian economy could not be achieved by mere
guidelines. Yes, relevant action is possible (REF
4.20).
* Implementation of such system are less costlier
than maintaining the participation of banks and
payment consumers. Of course the required matrix
needs to be maintained. (General)
Eventually, cost is the factor that is driving Indian economy not the long term goals (for early efficient framework). May not be very efficient ways for RBI / RBI might have thought something better!
Suramya