What is Digital Payment Index?
The Reserve Bank of India (RBI) announced on September 10, 2020 that a Digital Payments Index (DPI) will be launched. The index will assess and capture the extent of digitalisation of payments effectively.
- The DPI will be based on multiple parameters
- It is going to assess accurately about the penetration and deepening of various digital payment modes.
- It will help in bridging the gap of digital divide.
- It was recommended by a committee headed by Nandan Nilekani on deepening digital payment.
- The DPI Index could also lead to reduction in poverty and economic inequality.
- This is a composite scoring system and it will allow both consumers and stakeholders to better study the local area developments in,
- Demography and
- Acceptance related growth.
- RBI will also set up of a new Self-Regulatory Organisation (SRO) which will work to enhance the communication between payment sector stakeholders.
Need of DPI?
Digital payment system in India is growing rapidly. So, with the launch of DPI, banks and payment companies will get to map their user base. They can conclude which channels are more popular among consumers to make payments. It will help the end consumers evolve in the space, eventually. DPI will help to map the level and extent of digitisation across the country. Thus, it would be beneficial for banks to understand the pattern of usage of the digital channels in urban and rural areas.
Self-Regulatory Organisation (SRO)
SRO is a non-governmental organization (NGO) which has been provided with the power to create and enforce standalone industry, professional regulations and standards.
Category: Economy & Banking Current Affairs