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Indian Express
2 days ago
- Business
- Indian Express
RBI Digital Payments Index: A must-know for UPSC Exam
Take a look at the essential events, concepts, terms, quotes, or phenomena every day and brush up your knowledge. Here's your UPSC Current Affairs knowledge nugget for today on RBI's Digital Payments Index (RBI-DPI). (Relevance: From time to time, questions have been asked on various indices. In this context, the indices released by the RBI hold great importance, as they provide the picture of the Indian economy on various parameters. Such as if the RBI-DPI reflects the digital payment status in India, the RBI's Financial Inclusion Index (FI-Index) presents the picture of financial inclusion in India. Thus, knowing about these indices becomes important.) The Reserve Bank of India (RBI) has recently released a composite Reserve Bank of India – Digital Payments Index (RBI-DPI). The index for March 2025 stands at 493.22 as against 465.33 for September 2024, which was announced on January 29, 2025. Notably, RBI-DPI stood at 445.5 at the end of March 2024. 2. The central bank had announced the construction of a composite RBI-DPI in March 2018 as a base to capture the extent of digitisation of payments across the country. 3. The index comprises five broad parameters that enable the measurement of the deepening and penetration of digital payments in the country over different periods. 4. These parameters are Payment Enablers (weightage 25 per cent); Payment Infrastructure – Demand-side factors (10 per cent); Payment Infrastructure – Supply-side factors (15 per cent); Payment Performance (45 per cent); and Consumer Centricity (5 per cent). 5. The index is published on a semi-annual basis from March 2021 onwards with a lag of four months. 6. The index series since its inception is as under: FYI: The data itself may not be as important as identifying the overall trend, which is of primary significance. After knowing about the RBI-DPI, let's understand the Unified Payments Interface (UPI) and its significance in the rise of digital payments in India. 1. According to a recent note by the International Monetary Fund (IMF) titled 'Growing Retail Digital Payments: The Value of Interoperability,' India has emerged as the global leader in fast payments, largely driven by the success of the Unified Payments Interface (UPI). 2. Launched in 2016, UPI is a system developed by the National Payments Corporation of India (NPCI) and regulated by the RBI. It allows users to send and receive money instantly using just their phone numbers or unique identifiers called UPI IDs. 3. Unlike other payment methods, such as NEFT and IMPS, UPI also lets users or merchants request money from others by sending a simple message through their bank app. 4. One of the reasons why UPI is so successful is that it's completely free of charge. You can transfer any amount of money to anyone, anytime, without paying any extra fees to NPCI. You can also use UPI to make small payments at local shops, as there is no minimum limit on the transaction amount. Plus, UPI has a handy feature called AutoPay, which lets you set up recurring payments for your bills and subscriptions, saving you time and hassle. 5. UPI transactions are processed in real-time, using the existing NEFT, RTGS, and IMPS systems for settlements. UPI also ensures a high level of security and privacy for transactions. UPI transactions are backed by robust safety protocols and stringent regulatory measures established by the RBI. 6. UPI transactions are protected by advanced encryption protocols such as TLS, AES, and PKI, which ensure that sensitive information including user credentials and transaction data remains confidential during transmission. 7. UPI 2.0 is the latest version of UPI and offers several new features and improvements over UPI, such as overdraft facility, one-time mandate, invoicing, and signed intent and QR. These features aim to enhance the security, convenience, and transparency of UPI transactions for both customers and merchants. 8. Notably, The NPCI has announced a new set of regulations on UPI system that came into effect from August 1. NPCI has introduced fixed time slots for autopay transactions via UPI. Rather than transactions being processed at random throughout the day, it will take place at specific time. These payments will include planned payments including auto payments, subscriptions, utility bills, or EMIs. Although it's a behind-the-scenes change, it should help the platform run faster and reduce congestion throughout the day. 8. UPI users will only be able to check their account balance 50 times a day. 1. Financial inclusion across the country improved to 67 in March 2025, up from 64.2 in March 2024, according to the recently released Financial Inclusion Index (FI-Index) by the RBI. 'Improvement in FI-Index in FY2025 is contributed by usage and quality dimensions, reflecting deepening of financial inclusion, and sustained financial literacy initiatives,' the RBI said in a release. 2. The FI-Index has been conceptualised as a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with the government and respective sectoral regulators. 3. The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion. 4. The FI-Index comprises of three broad parameters: Access (having a weight of 35 per cent in the index), Usage (weight 45 per cent), and Quality ( weight 20 per cent). The weight of each parameter comprises various dimensions, which are calculated based on a number of indicators. 5. The FI-Index has been constructed without any base year, and as such it reflects cumulative efforts of all stakeholders over the years towards financial inclusion. It is published annually in July every year. Consider the following statements with reference to Reserve Bank of India – Digital Payments Index (RBI-DPI): 1. It is published on a semi-annual basis from March 2021 onwards with a lag of four months. 2. The RBI had announced the construction of a composite RBI-DPI in March 2018. 3. The index comprises five broad parameters that enable the measurement of the deepening and penetration of digital payments in the country over different periods. How many of the statements given above are correct? (a) Only one (b) Only two (c) All three (d) None (Sources: UPI powers your daily transactions, but do you know how it works? Here's a breakdown, New UPI guidelines to kick in from August 1,Knowledge Nugget: RBI's Financial Inclusion Index – A must-know for UPSC aspirants) Subscribe to our UPSC newsletter. Stay updated with the latest UPSC articles by joining our Telegram channel – Indian Express UPSC Hub, and follow us on Instagram and X. 🚨 Click Here to read the UPSC Essentials magazine for July 2025. Share your views and suggestions in the comment box or at Roshni Yadav is a Deputy Copy Editor with The Indian Express. She is an alumna of the University of Delhi and Jawaharlal Nehru University, where she pursued her graduation and post-graduation in Political Science. She has over five years of work experience in ed-tech and media. At The Indian Express, she writes for the UPSC section. Her interests lie in national and international affairs, governance, economy, and social issues. You can contact her via email: ... Read More
The Print
01-08-2025
- Business
- The Print
Over six-fold spike in digital transactions since 2019-20, govt informs Parliament
'RBI set up a Payments Infrastructure Development Fund (PIDF) in 2021 to encourage deployment of digital payments acceptance infrastructure in tier-3 to 6 cities, North-Eastern States and Jammu & Kashmir. As on May 31, 2025, around 4.77 Crore digital touch points have been deployed through PIDF,' Chaudhary said in his reply. The data was provided by Minister of State (MoS) for Finance Pankaj Chaudhary in a written response in Lok Sabha to a question asked by three Shiv Sena MPs—Shrikant Eknath Shinde, Naresh Ganpat Maske, Ravindra Dattaram Waikar—and Lok Janshakti Party MP Shambhavi Choudhary, New Delhi: The volume of digital transactions in the country grew more than six-fold from 3,401 crore in 2019-20 to to 22,198 crore in 2024-25, the government has informed Parliament. During the same period, the total value of money transacted recorded a nearly 77 percent growth to reach Rs 2,862 lakh-crore from Rs 1,619 lakh-crore. The RBI has developed the Digital Payments Index (RBI-DPI) to measure the extent of digitisation of payments across the country based on March as base year (Index 100). The index stands at 493.22 as of March 2025, representing a 10.7 percent growth from March 2024 value of 465.33. The data for the index is published by the RBI semi-annually, outlining the penetration of digital payments in the country. The index is based on five parameters, each given different weightages—payment enablers (25 percent), payment infrastructure- demand-side factors (10 percent), payment infrastructure-supply-side factors (15 percent), payment performance (45 percent) and consumer centricity (5 percent). Also Read: India, Russia in 'active discussion' over RuPay & MIR mutual transactions Uplifting MSMEs & under-served communities In his reply, Chaudhary outlined the initiatives undertaken by the government, the RBI and the National Payment Corporation of India (NPCI) to support MSMEs and under-served communities. The initiatives stated in the reply include promotion of low-value BHIM-UPI transactions among others. Earlier this year, the Union cabinet approved the Incentive Scheme for promotion of low-value BHIM-UPI transactions Person to Merchant (P2M), under which 0.15 percent of incentive will be provided to small merchants for transactions up to Rs. 2,000, the minister said. The purpose is to encourage small merchants to accept UPI payments. Chaudhary said digital payments have also played a critical role in uplifting under-served and un-served communities by providing them with a financial footprint that can be used to assess their credit worthiness in the absence of traditional documents. 'Digital platforms like UPI have enabled citizens including small vendors and rural users to accept digital payments, reducing cash dependency and increasing formal economic participation,' Chaudhary said. Due to the rise in digitisation of payments, more people can now access formal channels of credit thereby allowing their economic participation. (Edited by Ajeet Tiwari) Also Read: Rs 580 cr lost to digital payment frauds in last 5 yrs, only 43% recovered—govt to Parliament
News18
29-07-2025
- Business
- News18
Digital Payments In India Continued To See Robust Growth UPI Payments Digital India
Digital Payments In India Continued To See Robust Growth | UPI Payments | Digital India | N18V Digital payments in India continued to see robust growth, with the Reserve Bank of India's (RBI) Digital Payments Index (DPI) recording a 10.7% year-on-year increase as of March 2025, reflecting deeper adoption and performance gains in online transactions nationwide. News18 Mobile App - home videos Digital Payments In India Continued To See Robust Growth | UPI Payments | Digital India | N18V
Mint
28-07-2025
- Business
- Mint
India logs 65K digital payments worth ₹12K trillion in 6 years, says govt
New Delhi: India logged over 65,000 crore digital payment transactions worth ₹ 12,000 trillion in the last six fiscal years—FY19 to FY25—marking a surge in the technology's adoption across the country, including small towns and rural areas, minister of state for finance Pankaj Chaudhary said on Monday. This has helped reduce cash dependency in the economy and increase formal economic participation. In a written reply to a question in the Lok Sabha, Choudhary said the government has been closely working with various stakeholders, including the Reserve Bank of India (RBI), National Payments Corporation of India (NPCI), fintechs, banks, and state governments to boost adoption of digital payments across the country. The RBI had set up a Payments Infrastructure Development Fund (PIDF) in 2021 to encourage deployment of digital payments acceptance infrastructure in small towns and cities and remote parts, including the northeastern states and Jammu & Kashmir, the minister said. As on May 31, around 4.77 crore digital touch-points had been deployed through the PIDF. The RBI has developed the Digital Payments Index (RBI-DPI) to measure the extent of digitization of payments across the country. The index, published semi-annually, pegs March 2018 as the base period (index = 100). As per the latest release, the RBI-DPI was at 465.33 for September 2024, reflecting continued growth in digital payment adoption, infrastructure, and performance across the country, the minister said. The government, the RBI and NPCI have taken various initiatives to support small businesses and micro, small and medium enterprises (MSMEs) to facilitate the adoption of digital payment systems to expand their customer base and improve efficiency, he said. These include an incentive scheme for promotion of low-value BHIM-UPI transactions for small merchants, Trade Receivables Discounting System (TReDS) guidelines that allow MSMEs to get their invoices discounted on its platform at competitive rates, and the rationalization of merchant discount rate (MDR) for debit card transactions. The growing adoption of digital payments has revolutionized access to financial services, particularly for the underserved and unserved communities. By enabling seamless, traceable transactions through platforms such as unified payments interface (UPI), digital payments have created a robust financial footprint for individuals and businesses, Choudhary said. These footprints also serve as alternative data points for financial institutions, allowing them to assess the creditworthiness of customers even in the absence of traditional documentation, he said. More people are thus able to access formal credit channels and enter the financial ecosystem.
Time of India
28-07-2025
- Business
- Time of India
Digital payments index rises 10.7% in FY25, shows steady growth in supply-side infrastructure: RBI
Digital payments in India continued to see robust growth, with the Reserve Bank of India 's (RBI) Digital Payments Index (DPI) recording a 10.7% year-on-year increase as of March 2025, reflecting deeper adoption and performance gains in online transactions nationwide. The RBI-DPI stood at 493.22 in March 2025, up from 445.5 in March 2024 and 465.33 in September 2024, according to the central bank's latest semi-annual update. The index uses March 2018 as its base period, which is set at 100, PTI reported. 'The increase in RBI-DPI index was driven by significant growth in parameters viz. Payment Infrastructure – Supply-side factors and Payment Performance across the country over the period,' the RBI said in a statement on Monday. Launched in January 2021, the RBI-DPI is a composite measure designed to capture the extent of digitisation of payments across India. The index comprises five key parameters that track the penetration and deepening of digital payment systems. These include: Payment Enablers (25% weight) Payment Infrastructure – Demand-side factors (10%) Payment Infrastructure – Supply-side factors (15%) Payment Performance (45%) Consumer Centricity (5%) RBI has said the index is published twice a year, for March and September, with a four-month lag. The steady rise in the index highlights India's growing digital payment ecosystem, supported by the government and the central bank's focus on financial inclusion and digital infrastructure. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
