What should be the role of RBI in retail payment arena?

The process of infrastructure building should start with the mechanisation of cheque clearing operations. For this RBI has introduce MICR based clearing at the four metros cities and thereafter should be covering the other important centers. Introduction of Electronic Clearing Service (ECS) and Electronic Funds Transfer System (EFTS) has made a good beginning of the era of electronic payment mechanism in the country. ECS facilitated settlement of bulk payment instructions, EFT facilitated one-to-one remittances. RBI has also introduced the National Electronic Funds Transfer System (NEFT), a modified EFT system incorporating PKI based security features and centralized settlement facility in 2005, which should be encouraged and developed for improving its efficiency.

As for the benefit of customers, RBI has to initiate all banks to function centralised to facilitate the core banking solutions. By this there will will internet based banking facilities and mobile banking covering every banks even in rural areas. RBI's instruction to share ATMs of every banks was an great initiative.

Besides operating the various components of payments systems, RBI should also participates in these systems as a user. RBI acts as a service provider and after the system stabilises, the responsibility is handed over to other banks / institutions for further development. RBI also has the role of regulating and supervising the various payment systems.