RBI to launch index to improve quality of financial access

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The Reserve Bank of India (RBI) will soon begin to build a “Financial Inclusion Index” to measure and improve the extent of access, use and quality of financial inclusion in the country.

Speaking at an event Thursday, RBI Governor Shaktikanta Das said, “The index will have metrics across all three dimensions of financial inclusion. Work on the FI index is ongoing and will be published shortly by the RBI.

He said the second wave of the pandemic had taken a heavy toll on both lives and livelihoods. The recovery that began in the second half of 2020-21 was shaken by the second wave of the pandemic in April-May 2021.

Read | UPI, cards or wallet: which is better? And tips for getting the most out of each of these digital payment resources

“Our efforts for financial inclusion have enabled the government to provide transparent and timely financial support to vulnerable sections through direct benefit transfers (DBT),” he added.

DIGITAL PAYMENT ADOPTION

Shaktikanta Das said the wider adoption of digital payments is reflected in the number of prepaid payment instruments (PPIs) issued. These include smart cards, internet accounts, online wallets, mobile wallets and others to access the prepaid amount.

According to RBI, the use of PPIs increased at a compound annual growth rate (CAGR) of 53%, from 41 crore in May 2017 to 226 crore in May 2021. As of May 2021, 91% of PPIs were in the form of wallets and the rest in the form of cards.

Das said: “The digital payment scheme has grown since the introduction of rapid payment systems, such as the immediate payment service (IMPS) and the unified payment interface (UPI), which provide immediate credit. to beneficiaries and are available 24 hours a day ”.

According to RBI data for June 2021, payment systems in India processed over 15 crore transactions amounting to almost Rs 4.5 lakh crore per day.

Explained: Why Mobile Wallets May Become More Popular Than Bank Accounts

The UPI platform facilitating payment transactions via smartphones recorded more than 280 crore transactions in June 2021.

Das went on to say that higher adoption of digital payment reduced the stress caused by the pandemic. The Aadhaar Compatible Payment System (AePS) which facilitates fund transfers / payments and cash withdrawals via micro-ATMs and BCs using Aadhaar authentication has proven to be essential.

During the pandemic, cash transactions at points of sale in British Columbia via micro-vending machines saw a significant increase with more than 94 crore transactions representing 2.25 lakh crore in 2020-2021.

Aadhaar, the world’s largest biometric identity, facilitated financial inclusion through innovative digital platforms during the pandemic.

The NACH-Aadhaar Payments Bridge (APB) and PMJDY system have together helped to make efficient use of the banking facilities available to ordinary people.

During the pandemic, these facilitated the payment of cash benefits under Pradhan Mantri Garib Kalyan Yojana. The funds were transferred to 42.59 crore from PMJDY account holders. Among them, more than 55% of account holders are women.

RBI added that Rs 5.53 lakh crore was transferred digitally through 319 government programs, spread across 54 departments, during the pandemic in 2020-21 under this mechanism.

To promote financial inclusion, the central bank launched a pilot project in association with banks in which at least one district in each state / UT would be 100% digitally enabled.

The project launched in 2019, with a focus on 42 districts, will facilitate better access and increased use of digital payments by the common man, said the governor of the RBI.

By March 2021, banks reached 95.9% digital coverage of individuals, while the corporate figure stood at 89.8%.

In order to promote “universal access to financial services”, access to some form of bank point of sale was provided to 99.9 percent of target villages within a 5 km radius / hamlets with 500 households in the villages. hilly areas.


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