Rise In Digital Transactions – Economics

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CURRENT AFFAIR

According to the recent Reserve Bank of India (RBI) data, the month March saw a sharp rise in digital financial transactions countrywide.
Impact of lockdown

The total value of Real Time Gross Settlement (RTGS) transactions rose by 34% across banks.
It is the biggest online payment method offered by RBI.
The National Payments Corporation of India (NPCI)-run United Payments Interface (UPI), registered more than 125 crore transactions in March.
Recharges and bill payments as well as retail banking transactions, accounted for the majority of the volume of all the transactions.
NPCI-run Bharat Bill Pay was one of the beneficiaries, as it recorded 1.58 crore transactions in March as against 1.49 crore in February.
The usage of cash and other cash-based services dipped during the period.
Cash withdrawals from ATMs as well as usage of various cards (debit, credit) have also gone down significantly.
People’s requirements for cash have fallen since the spending is mainly on essentials and necessities.
The government’s Aadhaar Enabled Payment System (AePS) also saw a decline of 16.1 % in the number of transactions, in March.
The government uses AePS mostly for direct benefit transfer schemes.

An electronic fund transfer method through which money is sent on a ‘real time’ basis without any delays.
‘Gross Settlement’ refers to the processing of transactions on an individual basis and not in a batch wise system.
Minimum amount that can be sent via RTGS mode is Rs.2 lakh and has no maximum limit.
RTGS is not a 24×7 facility and is available only during working hours of banks.

It is an advanced version of Immediate Payment Service (IMPS)- round–the-clock funds transfer service to make cashless payments faster, easier and smoother.
UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
National Payments Corporation of India (NPCI) launched UPI with 21 member banks in 2016.

Driven by National Payments Corporation of India (NPCI).
Payment of all bills
Provides an interoperable and accessible “Anytime Anywhere” bill payment service to all customers across India
Certainty, reliability and safety of transactions.

AePS is developed by the National Payments Corporation of India (NPCI)
Allows people to carry out financial transactions on a Micro-ATM by furnishing just their Aadhaar number and verifying it with the help of their fingerprint/iris scan.
Funds can be transferred from one bank account to another simply through their Aadhaar numbers.
Security to financial transactions – bank details would no longer be required to be furnished while carrying out these transactions.

Umbrella organization for all retail payments systems in India.
It was set up with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA).
Objectives –
To consolidate and integrate the existing multiple systems into a nation-wide uniform and standard business process for all retail payment systems.
To facilitate an affordable payment mechanism to benefit the common man across the country and propel financial inclusion.