As part of its G20 presidency, India is working to broaden the narrative beyond financial stability and financial integrity concerns, to capture cross-sectoral and macro-financial implications and risks, RBI Deputy Governor Michael Patra said.
“We are working to strengthen financial institutions’ ability to deal with third-party risks and outsourcing, including as a result of BigTech and fintech, and also strengthen global cooperation to strengthen the financial sector’s cyber resilience,” Patra said as part of his speech. at the Indira Gandhi Institute of Development Research (IGIDR) alumni conference, held on Wednesday.
Interoperable payments
India has prioritized increasing interoperability across domestic payment methods as it prepares for the launch of the digital rupee. Internationalization of homegrown payment methods through linkages with payment service providers has also increased, such as those with Bhutan and Singapore for QR code-based merchant payments, and the extension of UPI payment capability to inbound travelers from G20 nations for local merchant transactions.
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These initiatives are also expected to make cross-border peer-to-peer (P2P) transfers more cost-effective and deepen trade, travel and remittances between the two nations, Patra said, adding that other such links are on the anvil. .
India has become the largest player in real-time payment transactions globally, with a share close to 50 percent, with UPI processing around 900 crore transactions in April. Total digital payments are poised to triple to $10 trillion by 2026, where two out of three transactions will be through non-cash modes, he said.
Higher transfers
India is also currently receiving the highest flow of remittances in the world at $108 billion by 2022, up 24.6 percent from a year ago, and accounting for 3 percent of India’s GDP.
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“The future of cross-border payments will be characterized by setting up dedicated payment rails for instant transfers, while ensuring digital and financial inclusion and greater harmonization of payment regulations across borders,” Patra said.
Other G20 priorities for India include addressing the macroeconomic implications of food and energy insecurity; Climate change; strengthen multilateral development banks (MBDs); debt sustainability; strengthening financial resilience through sustainable capital flows; financing inclusive, equitable and sustainable growth; leveraging digital public infrastructure; climate finance; and opportunities and risks from technological change.
