Context Of Nilenkani panel :
A committee set up by the Reserve Bank of India has proposed a National Common Mobility Card (NCMC) and has also proposed a host of measures, including all the payments by the government to citizens through the digital mode, to reduce cash transactions in the country.
Background of Nilenkani panel :
A committee headed by Nandan Nilekani has recommended several suggestions to broaden the acceptance infrastructure and deepen digital financial inclusion.
Recommendations of the panel :
- Reducing the interchange on card payments by 15 basis points hoping this will “increase the incentive for acquirers to sign-up merchants
- Setting up a committee to review the merchant discount rate and interchange on a regular basis. Now, merchant acquisition is central to expanding the payment ecosystem.
- Ensuring no user charges for digital payments, and providing businesses tax incentives “calibrated on the proportion of digital payments in their receipts”.
- Non-banks be encouraged to participate in payment systems
- The government must ensure that all payouts must be done through digital means. This includes: salaries, pensions, Direct Benefits Transfer (DBT) and payments for goods and services procured
- RBI should consider the setting up of an acceptance development fund, which is used to develop new merchants in poorly served areas
National Common Mobility Card (NCMC):
The card (NCMC) has two instruments on it:
- A regular debit card which can be used at an ATM,
- A local wallet, which can be used for contactless payments, without the need to go back to the server or additional authentication. It is envisioned that a single card will be usable for all local travel needs across the country.
- Post demonetisation, the shift towards digital payments has been particularly striking. Yet, acceptance, from an infrastructure perspective, continues to be low.
- Rather than focusing more on the card-based ecosystem, perhaps greater emphasis could have been placed on the Aadhaar-enabled payment systems, which is likely to have greater appeal, especially in the rural hinterland.
- There is a need to distinguish between the RBI’s role “as an infrastructure institution providing settlement function from its role as the regulator of the payments system
Source: The Hindu,The Indian Express