Domestic, Regional and International Coordination

Domestic Co-ordination

PSS Vision 2019-2021 envisages better co-ordination among various inter-regulatory bodies to remove frictions in regulation and ease system operator / customer comfort. The endeavour is to have a co-ordinated approach to regulation and supervision within RBI and also with various other regulators. RBI, therefore, has set up two separate committees, (i) Inter-regulatory coordination committee comprising sectoral regulatory authorities, viz., Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Telecom Regulatory Authority of India (TRAI), Ministry of Electronics and Information Technology (MeITY) and Department of Telecommunications (DOT); and (ii) Inter departmental coordination committee comprising the various regulatory and supervisory departments of RBI.

The Committees are expected to meet once every quarter to discuss the ways to augment digital payments and other related developments / issues. Apart from co-ordinating on regulation and supervision related matters of payment system, the committees will also look into improving the payment system security and implementation of the recommendations of the CDDP and co-ordinate as and when needed to enhance regulatory co-operation and sort out variances in guidelines / instructions issued by respective regulators.

Global Outreach of Payment Systems

There is scope for enhancing global outreach11 of the payment systems, including remittance services, through active participation and co-operation in international and regional fora by collaborating and contributing to standard setting.

UPI has been a huge success in India. In a little over 4 years since its launch in 2016, its growth, in terms of volume has eclipsed all other payment modes. The UPI model has unique features like open and interoperable platform, two factor authentication, facility for PSPs to build on top of existing infrastructure, multiple bank accounts in a single application, e-mandate feature, compatibility with bank accounts and wallets, etc., that have made it appealing to other nations also. The growth of domestic card network, RuPay, also provides an opportunity for its global expansion.

RBI's PSS Vision 2019-21 envisaged enhancing global outreach of its payment systems, including remittance services, through active participation and co-operation in international and regional fora by collaborating and contributing to standard setting. RBI, in close collaboration with the Government and NPCI, is working in the direction of expanding the reach of UPI and RuPay globally. To bestow undivided attention towards this goal, NPCI has incorporated a wholly owned subsidiary for international business (styled NPCI International Payments Limited). While RuPay cards are being accepted the world over, the issuance of RuPay cards in Bhutan has been facilitated. A soft launch of UPI was done in Singapore, while its roll-out is in advanced stages in South Korea and UAE.

Globally there has been lot of interest in UPI. BIS has expressed interest in working with RBI towards building a prototype of the system that could be replicated and scaled up in other countries to realise the potential of UPI as a public good.

International Coordination

Committee on Payments and Market Infrastructures (CPMI)

CPMI is a committee formed under the BIS with the objective to promote safety and efficiency of payment, clearing, settlement and related arrangements, thereby supporting financial stability and the wider economy. CPMI is a global standard setting body that aims at strengthening regulation, policy and practices through central bank cooperation. The CPMI also monitors and analyses developments in these areas, both within and across jurisdictions.

RBI is a member of CPMI and actively participates in various task forces and working groups formed by the CPMI in the area of PSS as well as FMIs. RBI contributes in undertaking assessments of other member jurisdictions and also participates in surveys by providing inputs on the features of systems operating in India. RBI is also involved in drafting and reviewing consultation and discussion papers drafted by CPMI. Further, the statistics on PSS operating in India are also shared with CPMI for publication in the Red Book statistics which contains PSS statistics of member countries.

The guidance released by CPMI on FMIs and payment systems is adopted by RBI and the measures are implemented to ensure adherence to the same. The progress of implementation of the measures in India is monitored through participation in surveys for progress monitoring and implementation circulated by the CPMI.

As a member of CPMI, RBI attends the periodic CPMI meetings where apart from discussing the progress of various work streams of the CPMI, the developments in member countries are also presented to other members. RBI also is a member of various working groups constituted by CPMI and actively contributes to the papers published by CPMI.

BRICS

A Special Task Force on Payment Issues has been constituted by BRICS to work out a common approach to developing a payment infrastructure that would be independent from traditional methods of financial messaging exchange. RBI has nominated two officers to the Task Force.

SAARC Payments Council (SPC)

India is currently in the chair of SPC. Payment Systems statistics and developments of all the countries are collated and hosted on SPC website, which is maintained by RBI. The idea of a Single Harmonised Payments Mechanism for SAARC is being actively discussed. Since the various SAARC countries are at different levels of development, it was decided that member countries will first assess the standards in their country to see if they have reached a critical level of maturity before taking a call on integration.

SWIFT Oversight Forum (SOF)

SWIFT is a cooperative society registered under Belgian law and is owned and controlled by its shareholders. The National Bank of Belgium (NBB) is the lead overseer of SWIFT, and is supported by the G-10 central banks. In SOF, the G10 central banks are joined by other central banks from major economies, viz., Bank of Korea, Bank of Russia, Central Bank of the Republic of Turkey, Hong Kong Monetary Authority, Monetary Authority of Singapore, People's Bank of China, Reserve Bank of Australia, Reserve Bank of India, Saudi Arabian Monetary Agency and the South African Reserve Bank.

SOF provides a forum for the G-10 central banks to share information on SWIFT oversight activities with a wider group of central banks. The oversight primarily focuses on ensuring that SWIFT has effective controls and processes to avoid posing a risk to the financial stability and the soundness of financial infrastructures. RBI as a member of the SOF actively monitors the developments and security controls put in place by SWIFT. RBI also ensures that all SWIFT users in India adhere to and comply with SWIFT's Customer Security Program. Any issues faced by banks / entities using SWIFT in India are taken up in the SOF for discussion and resolution.

LEI Regulatory Oversight Committee

LEI-Regulatory Oversight Committee (LEI-ROC), established in 2013, is the body responsible for regulatory oversight of the Global LEI System, involving a group of 71 public authorities and 19 observers from more than 50 countries, LEI-ROC is comprised of Plenary, Executive Committee, Committee on Evaluation of Standards and other working groups. Global LEI Foundation (GLEIF) is tasked to support the implementation and use of LEI through Local Operating Units (LOUs), which are authorised by GLEIF to issue LEIs. Currently, RBI is one of the Vice-Chairs of LEI-ROC.

ROC has been tasked to coordinate and oversee the Global LEI System since 2012. In 2019, the FSB identified ROC to become the International Governance Body (IGB), with an expanded mandate for governance of the globally harmonised Unique Transaction Identifier (UTI), Unique Product Identifier (UPId) and Critical Data Elements (CDEs). After taking note of the appropriate adjustments in ROC's existing governance, the FSB transferred all governance and oversight responsibilities of the UTI, UPId and CDEs to the ROC, with effect from October 1, 2020. Further, as IGB of the UTI, UPId and CDE, the ROC became the overseer of the designated UPId service provider, The Derivatives Service Bureau.

Source : RBI