India needs to make more efforts to decrease the volume of paper clearing and increase acceptance infrastructure to promote digital payments, according to an RBI report. The report found that India has a strong regulatory system and robust large value and retail payment systems which have contributed to the rapid growth in the volume of transactions in these payment systems, said the report released.
The report on ‘Benchmarking India’s Payment Systems’ which provides a comparative position of the payment system ecosystem in India relative to comparable payment systems and usage trends in other major countries. India is a “leader” in regulating costs of payments systems, number of debit cards issued and automated teller machines, and oversight by the Central bank, it said.
The country is “strong” in areas like having necessary laws and cash in circulation per capita. The country has been found to be “weak” on a few parameters including decline of usage of cheques, share of card payments in payments systems and value of card payments to quantum of cash in circulation, it added.
“It may be mentioned that RBI’s current vision document on Payment and Settlement Systems in India has also, inter alia, identified the above areas for receiving its focused attention,” it said.
The report comes following an announcement in the April monetary policy review, which spoke about the need to benchmark India’s payments systems.
“Benchmarking India’s Payments Systems is necessary to gauge India’s progress vis-a-vis payment systems and instruments in major countries and give further impetus to the planned efforts for deepening the digitisation of payments,” it had said.