Topic Of The Day:-“Turf Battle: On Independent Payments Regulator”
The RBI Makes A Valid Case Against The Proposal For A Separate Payments Regulator
The Reserve Bank of India (RBI) and the Union government are once again at loggerheads over the legitimate extent of their powers. In a rare gesture, the central bank last week made public its reservations against the government’s plans to set up an independent payments regulator, potentially setting the stage for a regulatory turf war. In a strongly wordeddissent note against the inter-ministerial committee for the finalisation of amendments to the Payment and Settlement Systems Act, 2007, published on its website on Friday, the central bank observed that it would prefer the Payments Regulatory Board to function under the purview of the RBI Governor. “There is no case of having a regulator for payment systems outside the RBI,” the note read. In support of its stance, the RBI stated that the activities of payments banks come well within the purview of the traditional banking system, which the central bank oversees as theoverarching financial regulator. So, according to this logic, it might make better sense to have the RBI oversee the activities of payments banks as well instead of creating a brand new regulator for the growing industry. “Regulation of the banking systems and payment system by the same regulator provides synergy,” it noted. The RBI, in essence, is pointing to the interconnection between the payments industry and the banking system to back the extension of its regulatory powers.
The RBI’s case makes good sense when seen from the perspective of the cost of regulatory compliance. As stated above, there is definite overlapping between the current regulatory powers of the RBI and the proposed regulations for the payments industry. A unified regulator can thus help in lowering the compliance costs and enabling the seamless implementation of rules. Further, there is the real risk that a brand new regulator may be unable to match the expertiseof the RBI in carrying out necessary regulatory duties. So it makes better sense to have the RBI take charge of the rapidly growing payments industry which can ill-afford regulatory errors at this point. The fact that the RBI has made public its dissent against the Union government’s idea, suggests that the central bank has serious problems with the dilution of its current powers over the financial sector. However, the RBI’s demand for the centralisation of regulatory powers also brings with it the need for exercising a greater degree of responsibility. At a time when there are increasing risks to the stability of the domestic financial system, both the government and the RBI must look to work together to tackle these risks instead of battling over regulatory powers.
MEANINGS AND WORDS
1) loggerheads
Meaning : a reddish-brown turtle with a very large head, occurring chiefly in warm seas(n).
Synonyms : aggressive , bellicose
Antonyms : calm
Example : Management and staff are at loggerheads over the plan.
2) gesture
Meaning : a movement of part of the body, especially a hand or the head, to express an idea or meaning.(n)
Synonyms : motion , sign
Antonyms : speech
Example : “Alex made a gesture of apology”(n)
3) turf
Meaning : grass and the surface layer of earth held together by its roots(n).
Synonyms : sod , field
Antonyms : house
Example : “they walked across the springy turf”(n)
4) dissent
Meaning : the holding or expression of opinions at variance with those commonly or officially held.(n), hold or express opinions that are at variance with those commonly or officially held.(v)
Synonyms : conflict , disagree
Antonyms : agree
Example : “there was no dissent from this view”(n),“two members dissented from the majority”(v)
5) purview
Meaning : the scope of the influence or concerns of something(n).
Synonyms : range , scope
Antonyms : infield
Example : “such a case might be within the purview of the legislation”(n).
6) stance
Meaning : the way in which someone stands, especially when deliberately adopted (as in cricket, golf, and other sports); a person’s posture.(n)
Synonyms : posture , position
Antonyms : unsteadiness
Example : “she altered her stance, resting all her weight on one leg”(n)
7) overarching
Meaning : comprehensive or all-embracing.(adj)
Synonyms : underlying , encircling
Antonyms : insignificant
Example : “a single overarching principle”(adj)
8) synergy
Meaning : the interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects.(n)
Synonyms : cooperation
Antonyms : isolation
Example : “the synergy between artist and record company”(n)
9) perspective
Meaning : a particular attitude towards or way of regarding something; a point of view.
Synonyms : viewpoint , angle
Antonyms : perspectiveless
Example : “most guidebook history is written from the editor’s perspective”
10) expertise
Meaning : expert skill or knowledge in a particular field.
Synonyms : skill
Antonyms : clumsiness
Example : “technical expertise”
