Why is it in the news ?
- The Reserve Bank of India proposed to relax norms for allowing new players in retail payment systems, hoping to boost innovation and competition.
- At the end of 2018, there were 89 authorised non-bank Payment System Operators (PSOs).
More in the news
- The RBI has been issuing guidelines for various payment systems and grants authorisation to non-banks for setting up and operating payment systems.
- Licensed banks also need to obtain specific permission from Reserve Bank for setting up and operating a payment system.
- The RBI’s policy paper on ‘Authorisation of New Retail Payment Systems’ proposes a multi-pronged policy action for a more appropriate level of retail payment systems and operators.
- With regard to entry point norms for entities, the paper said a judicious approach needs to be adopted with regard to net worth criteria.
- It also makes a case for alignment of regulatory framework to encourage enhanced participation of both bank and non-bank entities.
- The objective is to minimise the concentration risk in the retail payments market from a financial stability perspective and to give a fillip to innovation and competition.
Source
The Hindu.