The Reserve Bank of India (RBI) on Tuesday released a report on benchmarking India’s payment systems, which provides a comparative position of the payment ecosystem in the country relative to comparable payment systems and usage trends in other major countries.
On demonetisation of all Rs 500 and Rs 1,000 banknotes, the report said it led to a push in the use of cheques and digital payments, and use of e-Money picked up on a very large scale, "The digital landscape changed with the increase in the usage of UPI, Aadhaar Payments Bridge System (APBS), RuPay, Bharat Bill Payment System (BBPS), etc."
However, a relatively high level of cash in circulation offers scope for a higher level of digitisation and the last mile availability of Point of Sale (PoS) terminals is lower in India and much needs to be done in this regard, the RBI report said.
The study found that India has a strong regulatory system and robust large value and retail payment systems, but the country is required to take further efforts to bring down the volume of paper clearing and increase acceptance infrastructure to enhance digital payments.
Talking on cashless economy, the RBI report said there is a substantial growth seen in e-payments by government and in digital infrastructure in terms of mobile networks.
The 72-page report said that growth in the volume of payment systems transactions has been strong and steady in the country, but, the decline in cheques usage has, however, been slow.
“It may be recalled that in the First Bi-monthly Monetary Policy Statement, 2019-20 announced on April 4, 2019 , it was stated that “Benchmarking India’s Payments Systems is necessary to gauge India’s progress vis-à-vis payment systems and instruments in major countries and give further impetus to the planned efforts for deepening the digitisation of payments. A report containing the findings of such an exercise will be placed on the RBI website by the end of May 2019," the RBI said.
The benchmarking of India’s payment systems is undertaken by selecting a mix of 21 countries which include Australia, Brazil, Canada, China, France, Germany, Hong Kong, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sweden, Turkey, United Kingdom and USA.
The RBI analysis was attempted under 41 indicators covering 21 broad areas including regulation, oversight, payment systems, payment instruments, payment infrastructure, utility payments, Government payments, customer protection and grievance redressal, securities settlement and clearing systems and cross border personal remittances.
According to the RBI report, payment systems have been rated on the basis of categories:
(a) “Leader”
: ranked 1st or 2nd or 3rd
(b) “Strong”: in the top rungs of the countries other than the leaders (4th to 9th)
(c) “Moderate”: ranked in the middle (10th to 15th)
(d) “Weak”: in the lowest rungs (16th to 21st).
India ranks as a LEADER in the following indicators:
India ranks STRONG in the following indicators:
India ranks MODERATE in the following indicators:
India ranks WEAK in the following indicators:
First Published: Jun 4, 2019 8:16 PM IST
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