Saturday, December 25 2004 16:04 Hrs (IST) - World Time -

Mumbai: Reserve Bank of India's (RBI) vision document on payment systems has suggested that a national organisation should be set up to operate all retail payment systems in the country.

Seeking to free the Central Bank from operational functions, the vision document for 2005-08 said that the RBI should focus on regulation and supervision of payment systems.

The existing large value system such as the Negotiated Dealing System (NDS) should be hived off from the operations of RBI, it added.

Reserve Bank should establish a National Settlement system to provide a safe, secure, sound and efficient mechanism for payments that would match international standards and best practices, the document said.

Keeping in view the possibility of dishonour of payment instructions, on the due date, the provision of legal action against defaulters was necessary, it said adding instructions of payment are in the nature of non-negotiable standing instructions.

These instructions are not instruments and are not covered under the existing laws. Therefore, there was a need to issue desirable level of robustness, it added.

The Payment and Settlement Systems bill should be enacted and regulations for authorised payment and settlement should also be in place along with initiative to formulate legislation for credit transfer transactions, the document added.