As per recent reports, Union Finance Minister Sitharaman said on Friday that, the central government believes that this is not the right time to make digital payments chargeable. During the vent, Sitharaman said, “We see digital payment as the public good. People should be able to access it freely so that the digitization of the Indian economy becomes attractive. Also through digitization, we achieve a level of transparency which is so required.”
“Therefore, we still think it is not the right time to make it chargeable. We are more and more pushing toward open digital transactions, digitization, and platforms that can enable great access. The RBI`s recommendation is to a working paper and lets the working paper where it is,” the Minister added.
This statement of hers came against the backdrop of the Reserve Bank of India (RBI) seeking feedback from the public on the various changes proposed in the said payments system, including the possibility of imposing tiered charges on transactions done through the Unified Payments Interface (UPI).
However, the government of India Is said to have announced that it will not levy any charges on UPI services. Also, as noted in a report by DNA India, As announced in the Statement on Developmental and Regulatory Policies dated December 08, 2021, the Reserve Bank of India (RBI) has released a discussion paper on “Charges in Payment Systems” for public feedback, RBI said in a statement. The discussion paper was released on August 17.
On a similar note, however, in a late-night tweet on Sunday, August 21, the ministry of finance said, “UPI is a digital public good with immense convenience for the public & productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means.”
“The Govt had provided financial support for Digital Payment ecosystem last year and has announced the same this year as well to encourage further adoption of #DigitalPayments and promotion of payment platforms that are economical and user-friendly,” it said.
“UPI as a funds transfer system is like IMPS. Therefore, it could be argued that the charges in UPI need to be similar to charges in IMPS for fund transfer transactions. A tiered charge could be imposed based on the different amount bands,” said the central bank.
However, it had also issued a disclaimer on the same. “At this stage, it is reiterated that the RBI has neither taken any view nor has any specific opinion on the issues raised in this discussion paper,” said the RBI in the discussion paper.
“If charges are introduced, should they be administered (say, by RBI) or be market-determined,” the RBI asked in the discussion paper.
Reading so far, I hope you must have gotten a fair insight into FM Sitharaman’s statement stating, it is not the right time to make digital payments chargeable, and by now I believe you will be able to decide on your own whether or not you think it was the right thing to do and what do you think will be their next step!
In conclusion, what are your thoughts on FM Sitharaman’s statement stating, it is not the right time to make digital payments chargeable? Do let us know in the comments area below. To know more about such reports, do check out other articles we have on our website. Thank you for your time & if you found our content informative, do share it with your investor friends!
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