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Financial Institutions Must Be Robust, Efficient, Accessible For Growth: Das

Approximately 40 per cent of people who made a digital payment from their account (to a merchant or for a utility service) did so for the very first time since the start of the pandemic

Photo Credit : Twitter/ Shaktikanta Das

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For any society aspiring to grow faster, its financial institutions must be robust, efficient and accessible, said Shaktikanta Das, Governor, Reserve Bank of India (RBI) while addressing the global fintech festival in Mumbai. 

He said that the next decade of finance will be more focused on sustainable development and technology-led innovations transforming the lives of common people. 

"Therefore, sustainable development and ensuring a resilient financial system form the fulcrum for our policy architecture," he said. 

He said that the financial services industry in India has seen an enormous transformation. Products like internet and mobile banking, electronic funds transfer, UPI, Aadhaar e-KYC, Bharat Bill Payment System (BBPS), QR Scan & Pay, digital pre-paid instruments and similar other initiatives have transformed the traditional banking operations. 

"We now have digital mobile anywhere anytime banking. While several initiatives originated from the industry, the government and the regulators have created an enabling ecosystem to promote the fintech sector," Das said. 

Initiatives like Startup India, Digital India, India stack, account aggregators, peer-to-peer (P2P) lending platforms and 24x7 digital payment systems have proved to be key enablers, he said

The governor of the central bank said that the technology has been central to the resilience in the face of the Covid-19 pandemic, particularly during the lockdowns imposed around the world. 

It has also been central to our response to the crisis and in supporting the recovery. 

"Technology coupled with finance safeguarded the economies by ensuring seamless disbursal of loans, robust 24x7 payment systems, access to financial markets, insurance, MSME credit, pension services and direct benefit transfers," he said. 

As per the World Bank, at least 58 governments in developing countries have used digital payments to deliver Covid-19 relief. The scale of operations in India in this regard was of course much larger compared to other countries. 

The Global Findex Database 2021 reported a significant increase in financial inclusion around the world. In developing countries, 71 per cent of people have bank accounts, up from 42 per cent a decade ago. 

Approximately 40 per cent of people who made a digital payment from their account (to a merchant or for a utility service) did so for the very first time since the start of the pandemic.

"In India, the pandemic accelerated the push towards digitalisation, especially in the rural areas. The period from March 2020 to August 2022 has seen a massive growth of 427 per cent in UPI transactions, which reached a new high of 657 crore transactions in August 2022 alone," Das said 

He added that the number of UPI QR code-enabled payment acceptance points increased by about 9 crore (86 per cent YoY) to reach 20 crore at the end of July 2022, reflecting the growing acceptance and preference for contactless payments.


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