A digital payments Act may soon be a reality

As the government continues its efforts to reduce the economy’s dependence on cash, a digital payments Act is on the anvil, reports CNBC-TV18’s Prerna Baruah.

Sources told CNBC-TV17 that the IT ministry is working on strengthening the existing framework for digital payments, especially on the security front. It is also working towards fixing loopholes in the IT Act, 2000. A committee has been set up for this purpose.

The ministry also wants to give the banking and finance sector the “crucial infrastructure” tag in the existing legislation so as to ensure better protection for digital payments, including better efforts for security testing and hardening the security wall.Prime Minister Narendra Modi's pet project of a cashless India has been gaining traction since popular bank notes were devalued in November. Nearly three months since demonetisation, digital money transactions made on Unified Payments Interface (UPI) between January 1 and January 19 surged nearly 1,000 percent to Rs 980 crore from about Rs 90 crore in November 2016. Similarly, the volume of UPI-based money transfers during the period increased to 27 lakh from a meagre 3 lakh in November 2016, according to Reserve Bank of India’s Electronic Payment Systems representative data.The government has also been mulling a plan to set up a separate regulator for enabling electronic payment system in the country as well as regulate transaction charges.Watch video for more...