RBI chief Shaktikanta Das urges cooperation: Proposes integration of faster payment systems between India and Japan.
Reserve Bank of India (RBI) Governor Shaktikanta Das suggested linking faster payment platforms of India and Japan for easier cross-border transfers.
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India's UPI (Unified Payments Interface) has inspired new developments Das said that work is being done to connect payment related products and services, UPI with faster payment systems of other countries.
"Connection of India's fast payment systems And Japan can also be explored to leverage the power of fintech and make cross-border payments more efficient and less expensive,” he said at the symposium on Indian Economy 2023 in Tokyo.
In March, Japan's Digital Minister Kono Taro told Mint that Japan would eventually consider linking systems if his country adopts UPI. A footnote in the text of his speech uploaded by the RBI said the UPI-PayNow linkage for cross-border remittances between India and Singapore was to be launched in February 2023 and work on other similar linkages with several countries was underway.
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Another footnote states that although remittances from Japan constitute only a small fraction – 0.2% of India's total inward remittance receipts, the cost of sending remittances from Japan to India through banks is about half that of the United Nations. More than the Sustainable Development Goals. (UN-SDG) target of 3%. It states that these are based on estimates
The World Bank's Remittance Value Worldwide Database. Das said the advent of fintech has changed the landscape of traditional financial services, improving the delivery of financial services and making them faster, cheaper, efficient and more accessible.
He said India currently has the third largest fintech ecosystem in the world in terms of the number of fintechs operating in India, which is growing at a strong pace and is estimated to generate revenues of around $200 billion by 2030. This will contribute about 13%. of the total revenue of the global fintech industry in 2030.
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However, Das cautioned that while financial innovation facilitates ease of payments and reduces costs, it also creates risks and challenges for the financial system, which has implications for overall financial stability and market integrity.
According to Das, the RBI intends to play the dual role of a regulator as well as a promoter of innovation.
“While fostering innovation, our focus is on ensuring a well-regulated ecosystem that addresses systemic risks and challenges,” he said.
“The defining feature of the Indian model of digitalization is the leadership taken by the government and the public sector in building the infrastructure, on top of which innovative products are built by private sector fintech firms and start-ups,” Das said.
Speaking on UPI, Das said it has played an unprecedented role in the fintech revolution in India and its success story has become an international model. Data from National Payments Corporation of India (NPCI) shows that transaction volume on UPI has crossed 10 billion and stood at 10.6 billion in September.
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He said, “Its ability to instantly transfer money between bank accounts through mobile applications has changed the way people conduct digital transactions. UPI's interoperability across banks and payment systems has created an integrated payments ecosystem. ,