The Reserve Bank of India said strong regulations have helped Indias payments system grow rapidly and earned leadership position in the world even as bringing down volume of paper clearing along with raising acceptance of digital utility bill payments still remains a challenge.There has been substantial growth in e-payments by government and also in digital infrastructure in terms of mobile networks.
The Aadhaar-enabled electronic Know Your Customer and the smartphone revolution has also helped explosion in digital payment options, RBI said in a study which benchmarked Indias progress in payment systems over the past decade.RBI said India firmly remained in the global map in terms of innovations in retail payments.
The third largest Asian economy recorded an accelerated growth rate of over 50 per cent in the volume of retail electronic payment transactions in the last four years, backed by higher financial inclusion and adoption of mobile payments.
The traction seen in 2018-19 was largely due to the steep growth in Unified Payments Interface (UPI).Indias payment systems are considered to be efficient, safe and secure.
The payment and settlement systems are also adequately regulated and supervised.
Over the past decade, a number of innovations have taken place in retail payments.
These have reshaped payment processes and changed the retail payments landscape by influencing users in their choice of payment instruments, RBI said in a study for Benchmarking Indias Payments Systems.However, the progress in terms of reducing cash in circulation as percentage of GDP has seen a moderate progress even after demonetisation vis--vis other countries.
The progress in overall payment systems transactions volume and growth and number of credit cards issued have been ranked moderate.RBI carried out the exercise by selecting a mix of 21 countries including advanced countries such as the UK and the US, Asian economies like Japan, China and Hong Kong, and BRICS nations including Brazil, Russia and South Africa.Benchmarking Indias payments systems is necessary to gauge Indias progress vis--vis payment systems and instruments in major countries and give further impetus to the planned efforts for deepening the digitisation of payments, RBI said.The 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.