Working to reduce transaction cost on online payments: RBI to PAC

New Delhi, January 20

The Reserve Bank of India said on Friday that it was working on a mechanism to bring down the cost of transactions on online payments.

RBI Governor Urjit Patel, Deputy Governor R Gandhi and other senior functionaries appeared before Parliament's Public Accounts Committee (PAC) for oral evidence on 'Review of Monetary Policy' on Friday.

The RBI governor is believed to have told the panel in the meeting that last also nearly four hours that the cash situation in the country had now vastly improved, and would be better in a few more weeks.

He is also believed to have said that discussions to invalidate old high-value notes between the government and the central bank began in January 2016, contrary to reports that claimed that the central bank was asked to “consider” the measure on November 7, a day before Prime Minister Narendra Modi’s announcement.

To questions on impact of demonetisation on growth, Patel said although it may be affected in the short term, the decision would prove “beneficial” in the mid- and long-term.

Patel is also reported to have told the committee that the RBI was holding discussions with banks and payment gateways to bring down the cost of online transactions in an effort to encourage digital payment methods.

Patel has been given 15 days’ time to respond to other questions.

The committee will meet on February 10 to hold discussions officials of the Finance Ministry. Patel could also be called again.  — PTI