India, Feb. 10 -- Twenty years ago, four Reserve Bank of India (RBI) officers went on a study tour to Sweden to experience of the Swedish payments system first-hand. They were impressed with what they saw at the Bankgirocentralen or BGC AB. BGC AB was set up by the leading banks of that country and had become a one-stop clearing house for retail payments and related services. The officers felt that a similar model that combined private initiative with public-spirited innovation might work for India.

This idea found expression in RBI's 2005 vision document on payments. RBI should work jointly with the Indian Banks' Association (IBA) to set up a retail payments platform, the vision document said. Despite resistance from some bankers, the i...