The Reserve Bank of India (RBI) is exploring options to ring-fence domestic payment systems, the apex bank said in Payments Vision 2025 document.
The central bank is considering options including the need to mandate domestic processing of payment transactions.
RBI said: “Presently guidelines are in place for domestic storage of payments data. Banks and non-bank payment system operators are allowed to process payment transactions abroad subject to certain conditions.
“Keeping in view the emerging geo-political risks, options shall be explored to ring-fence domestic payment systems.”
The bank noted that it is seeing a significant rise in the number of intermediaries that facilitate payments between payers and recipients due to innovations in payment processing and fund transfers.
“Uniformity in implementation of user onboarding processes and transparency in operations of such intermediaries is found wanting,” RBI added.
The apex lender said that it will consider the need to bring all payment intermediaries including offline payment aggregators under its direct regulation.
All digital payment providers bear a cost for offering services which are either borne by the merchant or customers.
The bank noted that such costs should be reasonable and must not deter the adoption of digital payments.
“A comprehensive review of all aspects related to charges involved in various channels of digital payments shall be undertaken,” it said.
RBI’s Payments Vision 2025′ document proposed a number of initiatives to increase the number of digital payments by more than three-fold.
The apex bank also said that it is working towards the launch of central bank digital currency (CBDC) in India and it will study and explore various usecases to bring in further efficiencies in domestic and crossborder payment processing and settlement using CBDCs.