The RBI released a Policy Paper on Authorisation of New Retail Payment Systems asking for public feedback by 20 February 2019. The paper looks at the competition and concentration aspect of payment systems in India, noting the pivotal role that NPCI has garnered. The recommendations in the paper are for encouraging competition, opening on - tap licensing in all segments of the payments systems, putting in place liberal entry norms and aligning the regulatory framework towards increased participation by banks and non - banks. This is an encouraging development. In the Indicus Policy Brief, “Towards a Mature Digital Payments Market for India” (ICFI, October 2018), we had set out the same path forward for opening the payments space. We had also recommended that the government follow the Watal Committee recommendation for legal changes to classify NPCI as a Critical Payment Infrastructure Company (CPIC), to increase transparency and accountability. Another step needed is the separation of platform from product in all payment segments, in line with the guidelines of the Bharat Bill Payments System.
Some of the successes in financial inclusion through the Pradhan Mantri Mudra Yojana were noted by the Finance Minister in his speech on the Interim Budget 2019 - 20, for instance almost 70% of the accounts are held by women who are getting affordable and collateral - free loans to start their own businesses. Though women got special mention in the budget speech, we still await gender - disaggregated data from the RBI.
The latest Indicus Policy Brief makes a case for reworking the governance framework for India's financial inclusion mission, please read Policy Brief, December 2018.