RBI's Deputy Governor R Gandhi has said that granting licences to payment service providers cannot be a 'tick box exercise' as entities will be entrusted with money, and so fit and proper criterion is important.
Commenting on the issue, RBI's Deputy Governor R Gandhi told the media, "There is an implied suggestion that this (payment) sector needs to be freed of licensing mechanism and once a set of criteria are fixed, any number of entities meeting those criteria should be allowed to function. We differ from this idea."
"Such a free entry may not be appropriate for payment industry. We must remember that the payment service provider is entrusted with money and therefore 'fit and proper' criterion is of utmost importance and consequently, free entry based on tick box exercise will not be right and it can pose a risky proposition to the system as a whole," he added.
Gandhi further said that there is a misconception that non-bank entities are being discriminated as compared to the banking entities in the payment system arena.