: RBI needs to be more consumer friendly: Montek #finance #StockMarketNEWS RBI needs to be more consumer friendly: Montek New Delhi, Sept 22 (KNN) “The Reserve Bank of India needs to engage with
RBI needs to be more consumer friendly: Montek #finance #StockMarketNEWS
RBI needs to be more consumer friendly: Montek New Delhi, Sept 22 (KNN) “The Reserve Bank of India needs to engage with consumers and clearly explain them rationale and impact of its regulations”, highlighted Montek Singh Ahluwalia, former Deputy Chair, Planning Commission of India during an online discussion convened by CUTS International on the issue of Evaluating Consumer Welfare in Digital Payments.
The discussion reviewed a recent RBI circular that prohibits the continuation of frictionless e-mandates from modes like debit cards from October 2021, if conditions mentioned therein are not complied with by industry stakeholders, particularly banks.
Aruna Sharma, former Secretary, The government of India, wondered whether RBI was worried about the convenience of consumers or banks. Its actions suggest that it is more concerned about the well-being of market players than consumers. She cautioned that such an approach may make consumers move away from the digital economy, towards a cash economy.
It was pointed out that RBIs actions of increasing friction in digital payments are likely to hit vulnerable consumers, including digital novices and those with disabilities. This is likely to exacerbate the digital divide and pose challenges to the Government’s vision of an equitable digital society.
Pradeep S Mehta, Secretary General, CUTS International, noted that RBIs actions have forced consumers to choose between convenience and security of digital payments, which should not be the case. Consumers should be free to choose the modes of making digital payments, the amount which they are comfortable in transacting without additional authentication, and whether to securely store card details with merchants or not.
Akash Karmakar, Partner, Panag and Babu, pointed out that the RBI has not prescribed any consequences for non-compliance by banks, who have little incentive to comply with conditions of the circular.
Bhargavi Zaveri, Doctoral Candidate, National University of Singapore, highlighted the importance of friction free digital interfaces and pointed out that friction can lead to consumers abandoning transactions mid-way.
Ashish Aggarwal, Vice President, Nasscom, suggested that the regulator could provide weekly updates in terms of compliance by banks with its circular, and should work more closely with stakeholders to ensure consumer welfare is not compromised.
Close to 100 stakeholders participated in the discussion, including representatives from government departments, policy influencers, regulators, think tanks, consumer groups, academia and media.
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