Digital Payment System

* Real Time --- IMPS (by NPCI) (Rs 1 min) (24x7) & RTGS (RBI) (2 lakh to 50
crore)
* Delayed Payment --- NEFT (RBI) (hourly settlement weekdays, only the net
difference transferred) (<10 lakh), National Electronic Clearance Service (NECS)
(RBI) & National Automated Clearing House (NACH) (under NPCI) (Automated bill
payments for customers, salaries by companies & DBT for governments an instance of
use case) (Infact Aadhar Payment Bridge System has migrated to NACH platform
already)
* Narsimhan 2 (1998) recommended formation of Payment & Settlement Systems
Act 2007 ---> RBI supervises, all banks have full access, non-banks indirect access
(e.g., Phonepe, SBIBuddy)
* Ratan Watal Committee to promote Digital Payment
*
* All 24x7
* Non-banks to have direct access to services (promote innovation) (R
Gandhi, dy Gov, money laundering etc threats)
* Separating regulator (RBI) from commercial services like RTGS (like
BSNL & DoT)
* Block-chain technology must be explored as it could help overcome
limitations of paper currency

* ATM metwork
*
* In 2013, RBI made conditional White Bank ATM licenses for non-banks
providing 1:2 ratio of ATMs i.e., double ATMs for semi-urban/rural

* Demonitization
*
* Recalibration --- SS Mundra task force --- The cassette (cash-tray of
ATMs) were not in sync with size of new notes - size change + software upgrade was
required (2000 notes in place of 1000)

* Micro-ATMs ---- Budget proposed 0% excise duty

* PM Jan Dhan Yojana ---- Rupay cards free along with account creation
* Govt should act as role model in digi payment
*
* MDR - Unlike pvt entities, govt orgns like railways charge customers
to cover for MDRs, thus making digi payment less attractive
* Cheques have hidden costs - travel & time
* Taxing doesn't allow mobile wallets yet
* Tendering still relies on DD
* Toll booths brought in RFID very late
* Procurement & vendor registration hasn't integrated digital mode

* Steps by govt
*
* PAYGOVINDIA.GOV.IN (DeIT) --- for govt orgns to serve as digital
platform like e-commerce portal
* BHARATKOSH.GOV.IN (Min of Finance) - Serving as fragmentation source
- duplication --- Non-Receipt portal
* Rattan Watal recommends convergence
*
* If govt payments digitized 1 lakh crore
* Create a fund named DIPYAN (Digital Payments Action N/w)
* Behavioral Change - Rattan Watal -
 *
* (Taste) Hong Kong used Octopus card (transport card) to
nudge use & then extend it to retail shopping as well
* (Carrot) Mexico used TV show for lottery for card
payments - Lucky Grahak Yojana, Digi Dhan Vyapar Yojana in India
* (Stick) cap on cash transactions (Naidu supported but
Survey opposed such approach, it stood for only non-punitive measures)

* Finance Bill 2017

*
* Sec 269ST - cap of 3 lakh per transaction
* Sec 217DA - 100% penalty
* Sec13A - cap of 2k political funding as cash, rest only as
electoral bond
* Sec35AD - Depreciation allowed only if cash < 10k
* Sec44 - Lesser presumtive profit - hence lesser presumtive
taxation

* BHIM Referral bonus scheme & cashback scheme for merchants

* Digital payment is not a panacea, nor is all cash bad (Survey)

* In the long run
*
* Non-punitive measures
* Time bound incentives like Lucky Grahak