India’s Payment Banks: What’s not in there – Anand Raman

...........On a final note, here is something completely out of the box to think about. The RBI exercises full control over monetary policy, printing currency, declassifying notes and managing the level of cash/liquidity in the economy. In the opinion of this writer, it would be revolutionary if the RBI simply decided to take on the job of issuing “digital currency” to the PBs against cash deposits they maintain in a pooled account with the central bank – very similar to what every BC in this country already does for its distribution / channel partners today for remittances and every Telco with prepaid talk time. Technologically it is fairly straightforward to implement. It provides 100% CRR, ensures Zero Risk. As the central bank also settles funds across the financial network, interchange and cash management fees can be reduced drastically promoting a less-cash revolution – something that the RBI has passionately argued for............

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