The Reserve Bank needs to keep digital payments outside the purview of withdrawal restrictions on zero-balance basic savings bank deposit (BSBD) accounts and let the government allow a uniform fee of 0.3 per cent, in lieu of the Merchant Discount Rate (MDR), on e-commerce transactions, as per a report. The IIT Bombay report further said as much as Rs 5,000 crore can be raised per annum through a 0.3 per cent fee on payments through all electronic modes at e-commerce platforms, which could be used to maintain and strengthen the UPI infrastructure.
Such a fee imposed on e-commerce merchants and institutions who cannot transact in currency notes would be more in line with ‘digital payment facilitation fee’.
On the withdrawal restrictions on BSBD or zero-balance accounts, the report said “in the current phase of digital payments, RBI has to devise ways and means to keep the digital payments outside the age-old definition of withdrawal restrictions in savings deposit.”
Some banks have imposed restrictions on transactions. For example, a Mumbai-based bank has restricted the number of withdrawals (debit transactions) to 10 per month in a BSBD account — an account type that was especially introduced by RBI to promote financial inclusion.
A savings account, which is primarily meant for savings and less for transactions, should be the same in terms of usability for both rich and the poor, the report released on Sunday said.
Service charges can be different depending on the account categories but restricting number of transactions within the savings bank deposit account product for one and not for the other is discriminatory and possibly impinges on one’s right to equality, it added.
As India strides forward to move from paper-based payments to digital payments, the report said, a crucial aspect that would further acceptability is affordability of making and receiving digital payments.
With the ultimate stakeholders being the public and providers of the payment system, the government has to ensure an environment where the stakeholders are able to make a rational choice to embrace at least one digital means of payment that can closely substitute for currency, it said.
With UPI being the front runner that is allowing people to happily migrate from currency usage to digital payments, the government and the RBI must provide full support to keep UPI on rails, just like they have been supporting the currency based payment system of the country, it added.