As a part of its G20 Presidency, India is working towards expanding the narrative beyond financial stability and financial integrity concerns, in order to capture the cross-sectoral and macro-financial implications and risks, said RBI Deputy Governor Michael Patra.
“We are working towards strengthening financial institutions’ ability to manage third-party risks and outsourcing, inter alia, arising from BigTech and fintech, and also enhancing global cooperation to strengthen the financial sector’s cyber resilience,” Patra said as a part of his speech at the Indira Gandhi Institute of Development Research (IGIDR) alumni conference, held on Wednesday.
India has prioritised increasing interoperability across domestic payment modes as it gears up for the launch of the digital rupee. Internationalisation of home-grown payment modes through tie-ups with payment service providers has also increased, such as those with Bhutan and Singapore for QR code-based merchant payments, and extending of UPI payment facility to inbound travellers from G20 nations for local merchant transactions.
These initiatives are also expected to make cross border peer-to-peer (P2P) transfers more cost-effective and deepen trade, travel, and remittance flows between the two nations, Patra said, adding that other such link-ups are on the anvil.
India has emerged the largest player in real-time payment transactions globally, with a share close to 50 per cent, with UPI processing around 900 crore transactions in April. Total digital payments are poised to jump three-fold to $10 trillion by 2026, wherein two in every three transactions will be through non-cash modes, he said.
India also currently receives the highest flow of remittances in the world at $108 billion as of 2022, up by 24.6 per cent from a year ago, and accounting for 3 per cent of India’s GDP.
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“The future of cross-border payments will be characterised by the setting up of dedicated payment rails for instantaneous transfers, while also ensuring digital and financial inclusion and greater harmonisation of payment regulations across borders,” Patra said.
Other G20 priorities for India include addressing the macroeconomic implications of food and energy insecurity; climate change; strengthening multilateral development banks (MBDs); debt sustainability; strengthening financial resilience through sustainable capital flows; financing inclusive, equitable and sustainable growth; leveraging digital public infrastructure; climate financing; and opportunities and risks from technological change.