Why Electronic GST Payment Only Through Select Banks?

Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:

Mr. Neeraj Chandra, Head of Operations & Technology, Abu Dhabi Commercial Bank
Mr. Abhishek Arun, Senior Vice President, Paytm
Mr. Abhishek Mody, Associate Director-Payment & Digital Initiatives, IDFC Bank
Mr. Raj K Prasad, Head – GCC & CEO, DIFC Branch at Axis Bank
Mr. Viswadeep Chavali, Vice President, Equitas Small Finance Bank
Mr. Vikas R Panditrao, Co-founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous

GST (Goods & Service Tax) which is a part of Government Revenue is restricted to PSBs and 4 Private Sector Banks only along with direct taxes and other revenue collections. This is a very specific area and undertaken as an Agent (Agency Bank) of RBI. The authorization of other banks will be a policy decision of government based in consultation with RBI. What kind of digitalization is this when you don’t even see Payment banks, Small finance bank as an option to pay monthly GST?

The crucial question that burned up amongst FIAKS community was that why policymakers are really quick to implement policies which are against PPI, payments bank & small finance bank such as:

Minimum KYC based on telco data removed
Aadhar based e-KYC
Zero MDR

Why is it so difficult to allow Netbanking to Payments Banks & Small finance banks? Regulators may set high profile intellectual committees to release circulars on allowing Alexa payments or may spend years evaluating WhatsApp payment. Then why is it so difficult to do small things like enabling Netbanking for GST payments by all. A lot of time is being wasted which is not helping the entities operating in payments space. Policymakers should have thought this through before making MDR zero.

The challenge on the part of RBI:

While it is agreed that more/all banks should be allowed to bring further efficiency and innovation in government business as most of the efficiency through the adoption of alternate channels for tax payments were successful only after including the Private Sector Banks. However, there will be a challenge on the part of RBI to settle with so many Banks. As it’s a very niche and regulated area of activity with specific responsibilities on the part of authorized agency banks. Collection of taxes is within agency banking guidelines and all banks are not recognized to act as collecting banks. Government is yet to give collecting bank status to all banks.