Last week, R Gandhi, deputy governor of the Reserve Bank of India (RBI) responded to the recommendations of the Ratan Watal Committee report, which had been critical of the RBI regulating payments, had recommended the separation of payments and banking. Gandhi was speaking was at the launch of the BharatQR and used the platform to defend the RBI. Here are some of the takeaways and context around his statements: 1. Setting up a payments regulator: The Watal Committee had recommended the formation of a Payments Regulatory Board (PRB) which would regulate payments in the country. The PRB would look at regulation of payments independent from the function of central banking. The PRB can be formed by making the Board for Payment and Settlement Systems more independent by introducing members from outside the RBI. The Governor of RBI will be the chairman of the proposed PRB. But its composition will have a majority of non-RBI members nominated by the Central Government. What the deputy governor said: Gandhi defended the BPSS as being independent by saying "For the records, I may mention that the BPSS as it stands today does have eminent independent members with knowledge, experience, and expertise in payment systems and information technology and operations. Hence, it is welcome to make this arrangement de jure in PRB." MediaNama's take: Currently, the BPSS only has members from the RBI and a few permanent invitees. However, representation from the non-bank entities which engaged in payments would always help in growing the eco-system. As the…
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