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Government panel recommends setting up an independent Payments Regulatory Board
News
- Finance Minister proposed about creation of Payment Regulatory Board (PRB) in Budget 2017-18.
Key Facts
- The government has set up Subhash Garg committee to re-examine the draft Payment and Settlement System Bill.
- Objectives of the draft Payment and Settlement Bill
- Foster competition
- Consumer Protection
- Systemic Stability
- Resilience in payments sector
- Establishment of an independent PRB
- Treating non-banks as significant players in the payment ecosystem
- To consolidate and amend the laws relating to payments
Recommendations of the Committee
- It suggested PRB to be an independent payments regulator.
- The committee supported the view that formal mechanism of coordination is required between the RBI and PRB to regulate payments to ensure financial stability, monetary policy and credit policy.
- As per the report, RBI wants the chairperson of PRB should be from RBI as well as RBI to have a casting vote.
- RBI wanted to be provided with sufficient powers in the context of monetary policy function but the committee rejected the view.
- The committee affirmed RBI that substantial provisions are included in the bill to give the central bank the powers to make a reference to PRB to consider any matter, which is related to monetary policy.
- RBI’s view: Problems could emerge in the regulation of payments if PRB is not within the ambit of RBI.
