On November 7, 2023, the Shaktikanta Das, Governor of Reserve Bank of India (RBI), released the 1st flagship publication of the Centre for Advanced Financial Research and Learning (CAFRAL) titled ‘India Finance Report 2023 (IFR 2023)‘. The report stated that India’s fintech sector could replace traditional banking in the near future.
- The theme of the report is ‘Connecting the Last Mile: Non-Banking Financial Companies in India’.
- CAFRAL, promoted by RBI, is a not-for-profit organisation established in 2011 to promote research and learning in banking and finance.
What is in the Report?
The report offers new insights on India’s non-banking financial sector, helping regulators, policymakers, and other stakeholders understand its unique strengths and opportunities. For this report, monthly Unified Payments Interface (UPI) transaction data from 30 States and union territories over 2018-2022 and sector-wise lending data from CIBIL were analysed.
How Fintech Sector is growing?
India’s digitalization, driven by initiatives like India Stack and UPI, has led to rapid growth in digital and FinTech lending, enhancing financial inclusion. However, the report emphasizes the need for tailored regulations to support this growth while ensuring stability.
Key Points:
i.There is a 10% increase in per capita UPI transactions usually leads to a 4.6% rise in fintech lending and 1.5% in lending by commercial banks
ii.As of March 2023, UPI network has over 30 crore unique users and 400 participating banks.
iii.Transaction value grew at 163% CAGR (Compound Annual Growth Rate) from FY18 to FY23.
iv.Transaction volume increased at 56% CAGR during the same period.
v.Average transaction size rose from Rs 120 in FY18 to Rs 1,660 in FY23.
vi.UPI’s contribution to digital transactions grew from 4% in FY18 to 52% in FY22 (by volume).
vii.In October 2023, UPI recorded 1,141 crore transactions, totaling Rs 17.16 lakh crore.
PayGlocal gets RBI nod for Payment Aggregator License
PayGlocal, a cross-border payments platform, receives in-principle approval from RBI for Payment Aggregator (PA) license. This will allow PayGlocal to onboard merchants for online payment processing.
- Founded in 2021, PayGlocal provides secure online payment solutions through various methods.
- The company is backed by investors like PeakXV (formerly Sequoia Capital India) and Tiger Global.
Recent Related News:
i.The Reserve Bank of India (RBI) has issued a ‘Draft Circular – Arrangements with Card Networks for issue of Debit, Credit and Prepaid Cards’ empowering the debit, credit, and prepaid card users in India with Card network portability w.e.f. October 1st, 2023.
ii.RBI released a notification addressing all the banks regarding the inclusion of ‘NongHyup Bank’ in the Second Schedule to the Reserve Bank of India Act, 1934.
About Reserve Bank of India (RBI):
Governor – Shaktikanta Das
Deputy Governors – Swaminathan Janakiraman, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar
Establishment – 1st April 1935
Headquarters – Mumbai, Maharashtra
