RBI’s Payment System Report
Context
Recently, The Reserve Bank of India (RBI) released its bi-annual Payment System Report in December 2024. The report analyzes the payment trends over the past five years (up to CY-2024) and it also highlights India’s rapid digital payment growth.
Relevance:
GS-03 (Economy)
Key Highlights:
- Growth of Digital Payments
- In 2013, India recorded 222 crore digital transactions worth ₹772 lakh crore.
- By 2024, digital transactions will have grown 94 times in volume and 3.5 times in value.
- UPI’s Dominance
- UPI transactions have seen a compound annual growth rate (CAGR) of 74.03% in volume and 68.14% in value over the last five years.
- It remains the backbone of India’s digital payment ecosystem.
- Credit & Debit Card Trends
- The number of credit cards has more than doubled in five years, indicating a shift toward credit-based spending.
- Debit card usage has remained relatively stable.
- India’s Global Integration
- India has joined Project Nexus. It is a BIS-led initiative linking fast payment systems (FPS) across Malaysia, Philippines, Singapore, Thailand, and India.
- This enables instant cross-border retail payments, boosting financial connectivity with ASEAN nations.
- Regulatory Framework
- Payments and Settlement Systems Act, 2007 (PSS Act) empowers RBI to regulate and supervise payment systems.
- The Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), headed by the RBI Governor, is the highest policy-making body for payments.
Conclusion:
The report underscores India’s digital payment revolution, the globalisation of UPI, and the evolving role of RBI in regulating the payment landscape.