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RBI in talks with banks to boost volumes in advance payment system products

The Financial Express
Banking Bureau, January 18, 2006

In a bid to increase the volume of business in advance payment system products, the Reserve Bank of India (RBI) has initiated discussion with the bankers. In a late evening meeting held with the bankers on Monday, the RBI has chalked out the steps which would help the banks to push the volumes in advance payment system. This was informed by Dr RB Barman, executive director, RBI, at the sidelines of a banking seminar, organised by Banknet India on Tuesday.

According to Dr Barman, “We have initiated discussion with the bankers and trying to figure out how to increase business volumes in the advance payment system mechanism. We believe there is a lot of potential in this area. We told the banks to push the business volumes in this system. They should try to create innovative delivery channels with suitable products. The products could be available through ATMs, website, bank branches and other routes.”

The banks were suggested to target the corporates, small and medium enterprises sector, small scale units and individuals with suitable products through appropriate delivery channels.

He also informed that the RBI is planning to extend the real time gross settlement (RTGS) mechanism to commodities and stock exchanges and government securities. The country’s central bank is also experimenting the idea of low cost ATMs in rural areas in order to increase ATM penetration in rural areas. RBI is discussing with premier educational institutions like Indian Institute of Technology Mumbai and Chennai for such an initiative. “We think it is possible to provide low cost ATMs in rural areas. We are also talking to the banking community to introduce low cost ATMs in those areas,” Dr Barman said.

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