Investment and Banking Case Study

Payment Systems in India - Reserve Bank of India’s Strategic Approach

OR

Abstract:
The Reserve Bank of India (RBI) has brought about considerable degree of reforms in the payment and settlements systems in India. RBI has made a reality check of its “Payment Systems – Vision 2001-03”. Buoyed by the considerable progress made so far “Payment Systems – Vision 2005-08” set up an ambitious roadmap to carry forward the reforms and to establish a safe, secure, sound and efficient payment system in India in consonance with international standards and best practices.

RBI intended to achieve this through certain specific strategic measures like setting up a new institutional structure for retail payment systems, establishment of a national settlement system, setting up the legal framework for payment and settlements, risk mitigation in payment systems, efficiency enhancements, rural sector facilitation and customer facilitation and protection. The revamping of payment systems was expected to result in transparency of electronic payments, facilitate government payment and collection systems, support small business growth, reach out to the non banking segment of the population, facilitate international remittances and encourage tourism. Analysts kept a close watch on how RBI would meet these expectations on the implementation front.

Pedagogical Objectives:

• To understand RBI's strategies for revamping of payment systems
• To discuss how RBI would meet the expections.

Keywords : Reserve Bank of India, Payment Systems, Internet Banking, Banking Technology, RBI – Vision Document, Efficiency enhancements, Customer Facilitation and Protection, Finance Case Study, Retail Payment Systems, National Settlement Systems, Risk Mitigation and Payment Systems, Rural Sector Facilitation