The RBI’s focus on the technological front during 2021-22 was on leveraging technology to facilitate digital penetration, innovative payment options, and consumer orientation towards a “less cash” dependent society, according to the excerpts from the part one titled ‘The Economy – Review And Prospects’ of the annual report on the working of the Reserve Bank Of India, released on May 27, 2022. With over 8.5 million payment touch points deployed in 2021 alone, the Payments Infrastructure Development Fund (PIDF) helped expand the digital payment acceptance footprint across the country.
Going forward, the emphasis in the payments space will be on raising awareness about digital payments and expanding the reach of payment systems across India and beyond. Implementing the geotagging framework will provide precise locations of existing payment touchpoints and will make it easier to implement targeted literacy programmes and intervention strategies. The possibility of connecting India’s payment systems to those of other countries, including the ongoing initiative to connect India’s fast payment system – UPI – with those of other countries, will improve cross-border payment arrangements, including remittances.
The RBI is working to introduce a central bank digital currency (CBDC) in India. CBDC must be designed in accordance with the stated objectives of monetary policy, financial stability, and the efficient operation of currency and payment systems. The RBI proposes a graded approach to CBDC implementation, progressing through stages of Proof of Concept 12, pilots, and launch.
In the FinTech space, RBI will facilitate setting up of 75 Digital Banking Units in 75 districts of the country during 2022-23. It will also work towards ensuring execution of key projects of importance through the Reserve Bank Innovation Hub (RBIH) during the year while finalising its vision, mission and strategy documents and a policy framework for digital banking and FinTechs. Testing and evaluation of entities under the third and fourth cohorts of the Regulatory Sandbox on MSME Lending and Prevention and Mitigation of Financial Frauds as also the outcomes from the hackathon HARBINGER 2021 are expected to provide innovative solutions for the financial sector.
