Reserve Bank of India has issued a press release on July 20th, 2021[1] announcing digital payment index RBI DPI for March 2021. RBI had previously announced regarding the construction of composite Reserve Bank of India – digital payment index with March 2018 as base to know the extent of digitization of payment across India. March 2021 has an index of 270.59 against the index of March 2020 that has an index of 207.84. The digital payment index across the country is as follows-

base March 2018- 100,

March 2019- 153.47,

September 2019- 173.49,

March 2020- 207.84,

September 2020 – 217.74,

March 2021 – 207.59.

Reserve Bank of India had announced the construction of a composite digital payment index to capture the extent of digitization of payments in a statement on the development and regulatory policies dated February 6th, 2020 as a part of the 6th bi-monthly monetary policy statement for 2019- 20.[2]

Reserve Bank of India- digital payment index comprises of five broad parameters are payment enablers which weight 25%, payment infrastructure Which is demand-side factors with 10%, payment infrastructure that is supply-side factors with 15%, payment performance with 45%, and consumer centricity with 5%. These parameters enable the measurement of deepening and penetration of digital payments over different periods in the country. The base is set at March 2018 at 100 and the index will publish the index on a semi-annual basis from March 2021 with a lag of 4 months, as Announced in Reserve Bank of India introduces the RBI digital payments index dated January 01, 2021.[3]

The parameters have sub-parameters that consist of various measurable indicators. Payment enablers have sub-parameters of the Internet, mobile, Aadhar, bank account, participants, and merchants. Payment infrastructure- demand side has sub-parameters of credit cards comment debit cards, prepaid payment instruments, customer registered mobile and Internet banking, and FASTags. Payment infrastructure- supply side has sub-parameters of automatic teller machines, business correspondence, bank branches, PoS terminals, intermediaries, and QR codes. Payment performance has supper emitters of unique users, digital payment systems- value, digital payment systems- volume, paper clearing, currency in circulation, and cash withdrawals. Consumer centricity has sub-parameters of awareness and education, frauds, complaints, declines, and system downtime.

There are other initiatives taken to encourage digital payments. National payments corporation of India (NPCI) has approved What’s app to go live with UPI, however, starting maximum registered user base it should be 2 crores. To encourage points of sale infrastructure in both physical and digital mode Reserve Bank of India has created payments infrastructure Development Fund tier 3 to tier-6 centers in northeastern states.

[1] Reserve Bank of India announces Digital Payments Index (RBI-DPI) for March 2021, Press Release: 2021-2022/597

[2] Press Release: 2019-2020/1890

[3] Reserve Bank of India introduces the RBI-Digital Payments Index, Press Release: 2020-2021/874

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