UPI Major Driving Force In Growth Of Digital Payment: MoS Finance

Unified Payments Interface (UPI) has been the major driving force in the overall growth of digital payment, and helped in reducing bank notes in circulation to 7.8% in the last financial year, the government said on Monday.

UPI transactions have grown from 92 crore in 2017-18 to 8,375 crore in 2022-23 at a Compound Annual Growth Rate (CAGR) of 147% in terms of volume, Minister of State for Finance Bhagwat K Karad said in a written reply to Lok Sabha.

Similarly, he said, the value of UPI transactions has grown from Rs 1 lakh crore in 2017-18 to Rs 139 lakh crore in 2022-23 at a CAGR of 168%.

UPI has achieved 8,572 crore transactions during the current financial year till Dec. 11, 2023.

"UPI has been the major driving force in the overall growth of digital payment transactions in the country accounting for 62% of digital payment transactions in 2022-23. The Year-on-Year growth in the value of bank notes in circulation has decreased from 9.9% in 2021-22 to 7.8% in 2022-23," he said.

The initiatives undertaken by the government to promote digital transactions include incentive scheme for promotion of RuPay Debit cards and low-value BHIM-UPI transactions (P2M), advisories by the Government of India to various stakeholders to improve payment acceptance infrastructure, allocation and monitoring year-wise digital payment transaction and merchant acquisition targets to the public and private sector banks, and Pradhan Mantri Gramin Digital Saksharta Abhiyaan (PMGDISHA) to augment digital literacy in rural India.

He also said the Reserve Bank of India has given permission to link RuPay credit cards to UPI.

"The benefits to the consumers are once the RuPay credit card is linked to UPI, there is no need to carry the physical plastic card for using it through UPI QR and enable the customers to spend using credit cards even at small merchant outlets with QR codes," he said.

Replying to another question, Karad said, RBI has informed that, as on Dec. 13, 2023, 39 Urban Co-operative Banks (UCBs), including four in Karnataka, namely, Sri Guru Raghavendra Sahakara Bank Niyamitha, Shimsha Sahakara Bank Niyamitha, the Hiriyur Urban Co-operative Bank Ltd, and the National Cooperative Bank Ltd, have been issued directions under 35A of Banking Regulation Act, 1949.

Further, during the last nine years, 57 banks were closed and three banks -- Punjab & Maharashtra Co-operative Bank, Lakshmi Vilas Bank, and Yes Bank -- were revived, he said.

In another reply, Karad said the Stand-Up India scheme has facilitated more than 1.77 lakh loans to women entrepreneurs as on Nov. 24, 2023, since the inception of the scheme.

SC/ST and Women entrepreneurs above 18 years of age are eligible for availing the loan under the scheme for setting up greenfield enterprises across the country.

Replying to another question, Karad said that UCO Bank had lodged an FIR with CBI on Nov. 15, 2023, regarding the transfer/deposit of Rs 820 crore to different account from the bank.

As per inputs received from RBI, as on Dec. 7, 2023, UCO Bank has recovered Rs 705.31 crore out of Rs 820 crore, he said.

Karad, in a separate reply, said RBI has imposed Rs 3.65 crore penalty on seven public sector banks while Rs 12.17 crore on similar number of private sector banks.

As per inputs received from the Reserve Bank of India (RBI), he said, it conducts inspections of the regulated entities (REs) under extant provisions of various statutes such as the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934.

With the enhanced offsite and onsite capabilities, the focus and scope of such inspections have improved in recent times, it said.