Working To Reduce Transaction Costs On Online Payments: RBI Tells House Panel
Urjit Patel has been given a fortnight to respond to the queries by the PAC members.
The Reserve Bank of India (RBI) on Friday informed a parliamentary panel that it is working on a mechanism to bring down transaction costs on online payments post demonetisation and cash-flow position has improved significantly.
RBI Governor Urjit Patel, along with Deputy Governor R Gandhi and other senior functionaries, appeared before Parliament's Public Accounts Committee (PAC) for an oral 'Review of Monetary Policy'.
Members asked a host of questions and the RBI Governor has been given 15 days to respond.
Sources said members were told by the RBI that a mechanism was being discussed with stakeholders, including banks and payment gateways, to bring down the cost of transactions in line with the government's initiative to promote digital payments.
It is learnt that Patel said the cash-flow position has largely improved in the country. However, there were some problems in remote rural areas and members were assured that the situation would improve in the next couple of weeks.
To questions on growth, Patel said there may be an impact of demonetisation in the short run, but the move will be beneficial for the economy in the mid and long term.
Later talking to reporters, PAC Chairman KV Thomas said the committee will meet again on February 10 to discuss the issues with finance ministry officials. He said the RBI governor could be called again, if required, after February 10.
Responding to queries by members, the RBI said the discussion to demonetise old high-value currency between the government and the central bank started in January 2016.
During the nearly four-hour meeting, the panel asked questions regarding a significant surge in deposits in several cooperative banks and urged the RBI to look into the issue.
The legal tender character of old Rs 500 and Rs 1,000 currency notes was cancelled by the government effective midnight of November 8 on the recommendations of the central board of the RBI.
The board meeting was attended by Patel, two deputy governors (R Gandhi and SS Mundra), and five directors of the RBI – Nachiket Mor, Bharat N Doshi, Sudhir Mankad, Shaktikanta Das and Anjuly Chib Duggal.
Sources said another director NS Vishwanathan (deputy governor) did not attend the meeting as he stayed back in Mumbai for "strategic reasons" to brief the bankers immediately after the decision on demonetisation was taken.
Another director, Natarajan Chandrasekaran, was abroad at the time of the meeting.