Mumbai, July 29 (SocialNews.XYZ) India is leading the global digital revolution, emerging as a frontrunner on the back of its robust digital public infrastructure, a vibrant financial technology (FinTech) ecosystem, and a conducive policy environment to emerge as the fastest-growing digital economy in the world, according to the RBI Report on Currency and Finance (2023-24) released on Monday.
Globally, India ranks first in biometric-based identification (Aadhaar) and real-time payments volume, second in telecom subscribers, and third in terms of the startup ecosystem, the report points out.
The flagship Unified Payments Interface (UPI) has revolutionised the retail payment experience for end users, making transactions faster and more convenient.
In the digital currency arena, the Reserve Bank is at the forefront with pilot runs of the e-rupee, the central bank digital currency (CBDC).
The digital lending ecosystem is becoming vibrant with initiatives such as the Open Credit Enablement Network, the Open Network for Digital Commerce, and the Public Tech Platform for Frictionless Credit.
FinTechs are collaborating with banks and non-banking financial companies (NBFCs) as lending service providers. They are also operating platforms to facilitate digital credit.
BigTechs are backing payment apps and lending products as third-party service providers.
Digitalisation in finance is paving the way for next-generation banking, improving access to financial services at affordable costs, and enhancing the impact of direct benefit transfers by the effective targeting of beneficiaries in a cost-efficient manner. Loans in the retail segment are being enabled by online payments and innovative credit assessment models with instant disbursements.
E-commerce is being boosted through embedded finance.
All these innovations are making financial markets more efficient and integrated, the report points out.
On the external front, digitalisation is driving growth in India’s services exports and lowering remittance costs. India’s digital journey is setting a benchmark for peer economies.
The Reserve Bank’s initiatives for internationalisation of home-grown payment modes, cross-border fast payment network linkages, and knowledge and experience sharing with peers are energising the transformation of its digital public infrastructure as a global public good.
At the same time, digital technologies also present challenges related to cybersecurity, data privacy, vendor and third-party risks. Emerging technologies can introduce complex products and business models with risks that users may not fully understand, including the proliferation of fraudulent apps and mis-selling through dark patterns. Balancing financial stability, customer protection, and competition while supporting an environment congenial for innovations is the key policy challenge, the report states.
The report finds empirical support for the positive role of the regulatory framework in increasing the confidence of consumers in digital financial products, boosting operating and technical efficiencies of financial institutions and engendering more liquid and integrated financial markets.
Source: IANS
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