It has been a while that there has been a buzz around the emerging concept of financial technology (fintech), which seems to be evolving at an unimaginable speed. The technological development taking place globally, have compelled the traditionally cash-driven Indian economy to respond promptly to the fintech opportunities. The modern payment systems have overcome the shortcoming of the traditional mode of cash based payments where handing of cash was the most cumbersome part of all transaction. It is a known fact that the overall economic efficiency and stability of any country is dependent on the payment and settlement system in that country. As a result, the regulators in our country, including the central bank, have also been revisiting their operating model and policies regularly, to ensure and carry out the development of national payment systems. The regulators have to closely safeguard the sanctity of payment systems, primarily from the viewpoint of systemic risk, risk of fraud, etc. Specifically, it is the responsibility of the central bank of any country, that is to say the Reserve Bank of India (RBI) for our country, to ensure and carry out the development of national payment systems.
This article is intended to provide a panoramic view of the schematics of regulation over Indian payment and settlement systems.