"The inclusion of Indian Rupee as a currency in Continuous Linked Settlement could be a step in this direction," the central bank said. It also suggested the possibility of extending Additional Factor of Authentication requirement to cross-border card transactions undertaken using cards issued.Īccording to the report, internationalisation of rupee will facilitate greater degree of integration of the economy with rest of the world, in terms of foreign trade and international capital flows. The report suggested expanding the scope of Real Time Gross Settlement to settle transactions in major trade currencies to facilitate processing of foreign currency transactions and establish India as a major centre for international financial trades. The central bank noted that the decline in India's rating in some parameters involving currency in circulation is explained by the increased demand for cash as a store of value during the COVID-related lockdown and the slowdown in economic growth during 2020. "Since the last exercise, India has demonstrated improvement in digital payment options available for bill payments, ticketing systems for public transportation, available channels for cross-border remittances and decline in cheque usage," the report said. This follow-on exercise, which covers the same countries and parameters used in the earlier study, was undertaken for the position in 2020.Īccording to the report, India was categorised as a 'leader' or 'strong' in respect of 25 out of 40 indicators, and as 'weak' in eight indicators. The benchmarking exercise was first carried out in 2019 with respect to the position in 2017. The central bank released a report on benchmarking India's payment system, providing a comparative position of the payments ecosystem with other major countries. It also stressed that internationalisation of Indian rupee will facilitate greater degree of integration of Indian economy with rest of the world, in terms of foreign trade and international capital flows.ĭon’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp.MUMBAI – India has made significant progress and moved to leadership position in large value payment systems and fast payment systems, which have contributed to rapid growth in digital payments in the country, the Reserve Bank of India said today. These measures could include, building on the UPI-PayNow interface and exploring avenues for interlinking UPI with fast payment systems in other jurisdictions, and enhancing/reviewing the prescribed limits for inward remittances using the Money Transfer Service Scheme (MTSS) to improve customer convenience. On way forward, the report said with global focus on enhancing cross-border payment arrangements, it is essential that India explores further actions in this arena, which would further its relative position and remove frictions in such transactions. However, this may not be a concern as cash withdrawals in India are also facilitated through other channels such as PoS terminals and micro ATMs using Aadhaar enabled payment systems (AePS), the RBI added. A single ATM catering to over 5,800 people as at end 2020. It also said though India has the third largest number of ATMs deployed, it continues to fare poorly with regard to people served per ATM due to its sizeable population. In 2020, the share of card payments in total payment systems transactions was the second lowest in India (14.7 per cent), with only Indonesia witnessing a lower share (7.2 per cent). However, RuPay is lagging in the credit card segment with below 3 per cent share of total cards issued. The report noted that India's domestic card network - RuPay - dominates the debit card segment as far as card issuance is concerned. Other parameters on which India has achieved a strong or leadership position include e-money and customer protection. Regulation continues to be strong in India with many proactive customer centric initiatives being taken. The RBI stressed that the learnings from the benchmarking exercise are expected to facilitate further improvements in the payments landscape in India.
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