Lok Sabha Question No. 2578 (UNSTARRED), answered on 2019-12-04
Subject: Digital Payment
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: Nihal Chand Chauhan

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION No. 2578

TO BE ANSWERED ON 04.12.2019

## DIGITAL PAYMENT

## 2578   SHRI NIHAL  CHAND:

Will the Minister of Electronics and Information Technology be pleased to state:

- (a) whether there has been significant increase in the number of digital payments after its promotion in the country;
- (b) if so, the details thereof along with the number of digital payment reported in the country during each of the last 3 years, State/UT-wise;
- (c) whether the Union Government has conducted any comparative study on digital payment in the country and the other nations of the world and if so, the details and the outcome thereof;
- (d) whether the Government has taken adequate steps for safety and security of various platforms of digital transactions operating in the country at present; and
- (e) if so, the details thereof?

## ANSWER

## MINISTER FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

- (a) and (b): Yes, Sir. Digital payment transactions are increasing on year on year basis. Number of Digital payment transactions during last three financial year are as below:

| Year       |   Total Digital Payment (Volume in Cr) |
|------------|----------------------------------------|
| FY 2016-17 |                                   1004 |
| FY 2017-18 |                                   2071 |
| FY 2018-19 |                                   3134 |

State/UT-wise details of most modes of digital payment transactions are not captured. However, details of digital transactions for FY 2017-18 & 2018-19 State/UT-wise for BHIM App, Rupay Debit Card & USSD (Unstructured Supplementary Service Data) are as below:

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| STATE/UT WISE DIGITAL PAYMENT   | STATE/UT WISE DIGITAL PAYMENT   | STATE/UT WISE DIGITAL PAYMENT   | STATE/UT WISE DIGITAL PAYMENT   | STATE/UT WISE DIGITAL PAYMENT   | STATE/UT WISE DIGITAL PAYMENT   | STATE/UT WISE DIGITAL PAYMENT   |
|---------------------------------|---------------------------------|---------------------------------|---------------------------------|---------------------------------|---------------------------------|---------------------------------|
|                                 | Volume in                       | thousands for                   | thousands for                   | FY 2017-18 Volume in            | FY 2017-18 Volume in            | FY 2017-18 Volume in            |
| Sl No.                          | State                           | BHIM                            | Rupay Debit Card USSD           | BHIM                            | Rupay Debit Card                | USSD                            |
| 1 Andaman                       | and Nicobar                     |                                 | 2.67                            | 581.08                          | 159.2                           | 1.79                            |
| 2 Andhra Pradesh                | 96.9 189273.12                  | 274.47 14864.35                 | 119.4                           | 940552.66                       | 22460.57                        | 76.13                           |
| 3 Arunachal Pradesh             | 190.2                           | 65.59                           | 2.11                            | 1598.43                         | 151.39                          | 1.63                            |
| 4 Assam                         | 3635.36                         | 9742.22                         | 19.26                           | 28212.41                        | 23475.07                        | 11.54                           |
| 5 Bihar                         | 23788.11                        | 9039.69                         | 172.95                          | 145483.88                       | 12268.54                        | 130.18                          |
| 6 Chandigarh                    | 7735.5                          | 1927.55                         | 52.34                           | 42492.47                        | 3227.57                         | 29.15                           |
| 7 Chhattisgarh                  | 385.69                          | 3675.12                         | 2.38                            | 2667.01                         | 5914.17                         | 1.02                            |
| 8 Dadra and Nagar Haveli        | 418.68                          | 569.08                          | 3.07                            | 2034.72                         | 836.55                          | 1.24                            |
| 9 Daman and Diu                 | 256.22                          | 411.05                          | 1.44                            | 1189.03                         | 700.12                          | 1.02                            |
| 10 Delhi                        | 17011.58                        | 28528.43                        | 64.41                           | 115859.87                       | 47224.82                        | 44.33                           |
| 11 Goa                          | 828.51                          | 1796.1                          | 2.91                            | 5186.03                         | 3260.91                         | 2.58                            |
| 12 Gujarat                      | 27903.26                        | 14160.37                        | 101.06                          | 129081.81                       | 23168.72                        | 54.16                           |
| 13 Haryana                      | 45335.61                        | 30556.5                         | 122.57                          | 313441.21                       | 68728                           | 83.82                           |
| 14 Himachal Pradesh             | 2930.24                         | 2249.85                         | 19.38                           | 16963.97                        | 3783.71                         | 13.78                           |
| 15 Jammu and Kashmir            | 1529.53                         | 662.6                           | 5.84                            | 10224.76                        | 1230.65                         | 4.16                            |
| 16 Jharkhand                    | 10846.5                         | 3077.5                          | 63.37                           | 60905.4                         | 5330.39                         | 44.19                           |
| 17 Karnataka                    | 59260.73                        | 35147.12                        | 98.22                           | 382348.33                       | 79505.78                        | 60.02                           |
| 18 Kerala                       | 16608.33                        | 9271.68                         | 23.13                           | 84908                           | 19566.94                        | 22.08                           |
| 19 Lakshadweep                  | 9.94                            | 0.14                            | 3.79                            | 96.81                           | 0.36                            | 10.41                           |
| 20 Madhya Pradesh               | 31713.05                        | 8185.59                         | 133.36                          | 161339.61                       | 14157.56                        | 86.47                           |
| 21 Maharashtra                  | 84020.28                        | 149799.68                       | 237.51                          | 487493.67                       | 279264.58                       | 162.98                          |
| 22 Manipur                      | 311.9                           | 101.01                          | 1.39                            | 2362.63                         | 185.34                          | 0.98                            |
| 23 Meghalaya                    | 231.1                           | 363                             | 1.7                             | 1672.84                         | 633.36                          | 0.73                            |
| 24 Mizoram                      | 91.78                           | 29.87                           | 0.22                            | 645.86                          | 60.06                           | 0.24                            |
| 25 Nagaland                     | 154.34                          | 36.77                           | 0.81                            | 1397.77                         | 63.31                           | 0.48                            |
| 26 Odisha                       | 27607.59                        | 36842.96                        | 101.53                          | 171034.68                       | 43095.25                        | 52.43                           |
| 27 Puducherry                   | 622.59                          | 1218.28                         | 1.4                             | 4061.13                         | 2276.42                         | 0.79                            |
| 28 Punjab                       | 7647.3                          | 8754.82                         | 49.9                            | 43817.72                        | 13688.08                        | 33.04                           |
| 29 Rajasthan                    | 29716.75                        | 7983.77                         | 83.08                           | 179371.97                       | 15408.64                        | 63.82                           |
| 30 Sikkim                       | 195.24                          | 121                             | 6.39                            | 1188.72                         | 213.22                          | 4.62                            |
| 31 Tamil Nadu                   | 30406.27                        | 37955.5                         | 62.42                           | 196556.38                       | 65638.15                        | 39.38                           |
| 32 Telangana                    | 6063.87                         | 25727.22                        | 2.53                            | 38191.29                        | 41652.27                        | 1.5                             |
| 33 Tripura                      | 496.9                           | 308.2                           | 2.76                            | 4203.58                         | 531.84                          | 1.54                            |
| 34 Uttar Pradesh                | 232208.99                       |                                 |                                 |                                 |                                 | 295.6                           |
|                                 |                                 | 139782.84                       | 391.91                          | 1414760.14                      | 194661.99                       |                                 |
| 35 Uttarakhand 36 West Bengal   | 6490.81                         | 4697.81 22728.18                | 44.03 58884.63 117.7            | 33949.36 175280.13              | 7742.98 90618.62                | 30.59 79.24                     |

- (c): Yes, Sir.  a comprehensive exercise for benchmarking India's Payment Systems was undertaken by RBI by  selecting  a  mix  of  21  countries  (including  advanced  economy  countries,  Asian  economies  and  BRICS (Brazil,  Russia,  India,  China  and  South  Africa)  nations  spread  across  all  the  continents  where  payment systems  are  considered  robust,  diverse  and  efficient.  The  executive  summary  of  the  report  is  placed  at Annexure I . The complete report is available at the link given below: https://www.rbi.org.in/Scripts/BS\_PressReleaseDisplay.aspx?prid=47222

(d) and (e): To build trust and confidence in the society towards Digital Payments, the Government of India has taken several steps to create awareness as well as to further strengthen the security system. These steps have been listed in Annexure-II .  In addition, the steps taken by Reserve Bank of India (RBI) in respect of digital payments security and awareness are mentioned in Annexure-III .

Annexure I

## Executive Summary of RBI Report on 'Benchmarking India's Payment System'

The  past  decade  has  witnessed  several  innovations  in  retail  payments  across  the  globe  including  India. Benchmarking  India's  Payment  Systems  facilitates  an  assessment  of  India's  progress  against  payment systems and instruments in major countries and provides further impetus to the planned efforts for deepening the digitisation of payments.

2.   A comprehensive exercise for benchmarking India's Payment Systems was undertaken by selecting a mix of 21 countries (including advanced economy countries, Asian economies and BRICS (Brazil, Russia, India, China  and  South  Africa)  nations  spread  across  all  the  continents  where  payment  systems  are  considered robust, diverse and efficient. The countries include Australia, Brazil, Canada, China, France, Germany, Hong Kong, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sweden, Turkey, United Kingdom and the United States of America.
3.      Reserve  Bank  of  India  (RBI)  has  relied  on  publicly  available information in this  report  and  has  made every effort to ensure that the information contained in the report is accurate.
4.   Payment Systems have been rated on the basis of categories, which are as under:
4. (a) 'Leader': ranked 1st or 2nd or 3rd;
5. (b) 'Strong': in the top rungs of the countries other than the leaders (4th to 9th);
6. (c) 'Moderate': ranked in the middle (10th to 15th); and,
7. (d) 'Weak': in the lowest rungs (16th to 21st).
5.   The benchmarking exercise aims to provide an understanding of the payment systems in place in India and how their usage preferences  compare with other countries. It is also a starting point for a meaningful analysis of the efficiency levels of India's payment systems.
6.    The  benchmarking  has  been  done  over  a  range  of  21  areas  and  41  indicators  as  indicated  below.  A snapshot of India's position, details of which are in the report, is as follows:

| Rating   | Indicator                                                                                                                | Area                                   |
|----------|--------------------------------------------------------------------------------------------------------------------------|----------------------------------------|
| Leader   | Regulation of costs of payment systems                                                                                   | Regulation                             |
| Leader   | Features available in Cheque instruments                                                                                 | Cheques                                |
| Leader   | Number of debit cards issued                                                                                             | Debit and Credit Cards                 |
| Leader   | Number of ATMs deployed across the country. Per capita cash withdrawal at ATMs                                           | Cash&ATM                               |
| Leader   | Share of Credit Transfers in payment systems                                                                             | Credit transfers                       |
| Leader   | Availability of alternate payment systems; Share of e-Money in payment systems                                           | e-Money                                |
| Leader   | Citizen to Government (C2G) e-payments; Business to Government (B2G) e-payments; Government to Business (G2B) e-payments | Government e-payments                  |
| Leader   | Oversight by the Central Bank                                                                                            | Oversight                              |
| Leader   | Cross border personal remittance flows                                                                                   | Cross Border Personal Remittances      |
| Strong   | Laws in place and scope of regulation                                                                                    | Regulation                             |
| Strong   | Cash in Circulation per capita                                                                                           | Cash                                   |
| Strong   | Number of Point of Sale (PoS) terminals deployed across the country                                                      | Debit and Credit Cards                 |
| Strong   | Volume and growth of Credit Transfers                                                                                    | Credit transfers                       |
| Strong   | Real Time Gross Settlement System (RTGS)                                                                                 | Large Value Payment Systems            |
| Strong   | Fast payment systems available in the country                                                                            | Fast payments                          |
| Strong   | Volume and growth of e-Money                                                                                             | e-Money                                |
| Strong   | Mobile and Broadband subscriptions                                                                                       | Digital Infrastructure                 |
| Strong   | Customer safety and Authentication Standards; Ombudsman scheme for Complaints Redress                                    | Customer Protection &Complaint Redress |
| Strong   | Central Counterparty operational in the country                                                                          | Securities Settlement &Clearing System |
| Moderate | Cash in Circulation as percentage of GDP                                                                                 | Cash                                   |
| Moderate | Overall Payment Systems transactions volume and growth; Value of payment systems transactions to cash in circulation     | Payment Systems Transactions           |
| Moderate | Number of credit cards issued                                                                                            | Debit and Credit Cards                 |
| Moderate | Debit and Credit Card usage at PoS terminals and online                                                                  | Debit and Credit Cards                 |
| Moderate | Presence of domestic Card Network and its share                                                                          | Domestic Card Network                  |
| Moderate | Government e-payments in the country; Government to Citizen (G2C) e-payments                                             | Government e-payments                  |
| Moderate | Regulation of Payment Aggregators                                                                                        | Aggregators                            |
| Moderate | Costs of cross border personal remittances                                                                               | Cross Border Personal Remittances      |
| Weak     | Rate of decline of cheques; Ratio of Cheque                                                                              | Cheques                                |

| volume vs payment systems volume                                                              |                                   |
|-----------------------------------------------------------------------------------------------|-----------------------------------|
| Share of debit and credit card payments in payment systems; Number of people per PoS terminal | Debit and Credit Cards            |
| Value of debit and credit card payments to cash in circulation                                | Cash vs Debit and Credit Cards    |
| Number of people per ATM; Ratio of ATM Withdrawal vs cash in circulation                      | Cash&ATM                          |
| Volume and year on year growth of direct debits; Share of direct debits in payment systems    | Direct Debits                     |
| Digital payment of utility bills; Public Mass Transportation systems in the country           | Digital Utility Payments          |
| Availability of channels and operators for cross border personal remittances                  | Cross Border Personal Remittances |

Annexure-II

## Initiatives by the Government of India

1. The Indian Computer Emergency Response Team (CERT-In) issues 34 advisories regarding latest cyber threats and countermeasures to ensure safe usage of digital technologies.
2. All  authorised  entities/  banks  issuing  PPIs  in  the  country  have  been  advised  by  CERT-In  through Reserve bank of India to carry out special audit by empanelled auditors of CERT-In.
3. Government has issued guidelines for Chief Information Security Officers (CISOs) regarding their key roles  and  responsibilities  for  securing  applications  /  infrastructure  and  compliance.  All  organizations providing digital services have  been  mandated  to  report cyber security incidents  to  CERT-In expeditiously.
4. Government has empanelled 84 security auditing organizations to support and audit implementation of Information Security Best Practices.
5. Government has formulated Crisis Management Plan for countering cyber attacks and cyber terrorism for implementation by all Ministries/ Departments of Central Government, State Governments and their organizations and critical sectors.
6. Forty  four  Cyber  security  mock  drills  are  being  conducted  regularly  to  enable  assessment  of  cyber security posture and preparedness of organizations in Government and critical sectors.
7. CERT-In have conducted nineteen training programmes for network / system administrators and Chief Information  Security  Officers  (CISOs)  of  Government  and  critical  sector  organisations  regarding securing  the  IT  infrastructure  and  mitigating  cyber  attacks. Government  has  launched  the  Cyber Swachhta Kendra (Botnet Cleaning and Malware Analysis Centre).
8. Government  has  initiated  setting  up  of  National  Cyber  Coordination  Centre  (NCCC)  to  generate necessary  situational  awareness  of  existing  and  potential  cyber  security  threats  and  enable  timely information  sharing  for  proactive,  preventive  and  protective  actions  by  individual  entities.  Phase-I  of NCCC has been made operational.
9. Under the  Information  Security  Education  and  Awareness  (ISEA)  Project  Phase-I  (2005-2014),  more than  44,000  candidates  were  trained  in  various  formal/non-formal  courses  in  Information  Security through 40 institutions. Around 100 Government officials were trained as Master Trainers in the area of Information Security.

Annexure-III

## Steps taken by RBI

1.  Securing  Card  Transactions:  (i) Banks  have  been  advised  to  provide  online  alerts  for  all  card transactions, vide, RBI circular dated March 29, 2011. (ii) RBI has also issued circulars dated September 22, 2011, February 28, 2013 and June 24, 2013 for securing electronic transactions advising banks to introduce additional security measures. (iii) RBI has directed banks to mandatorily put in place an Additional Factor of Authentication  for  all  Card  not  present  transaction  w.e.f.  01.05.2013  failing  which  the  issuer  bank  shall

reimburse the loss to customer without demur. (iv) All  authorised card payment networks are permitted to offer card tokenisation services to any token requestor, subject to certain conditions. 2.  Securing  Payments  through  Internet  Banking  /  Electronic  Payments: RBI  has  issued  circular  on 'Security  and  Risk  Mitigation  Measures  for  Electronic  Payment  Transactions'  (DPSS.CO.PD  No.1462 /02.14.003 /2012-13) dated February 28, 2013. 3. Prepaid Payment Instruments (PPIs): RBI has issued 'Master Direction on Issuance and Operation of PPIs'  (MD on PPIs) (DPSS.CO. PD. No.1164/02.14.006/2017-18) dated October 11, 2017 (updated as on December 29, 2017).  As per para 15.3 of MD on PPI issuers were instructed to put in place a framework to address the safety and security concerns, and for risk mitigation and fraud prevention. 4.  Limiting  Customer  Liability  on  Unauthorized  Electronic  Banking  Transactions: RBI  has  issued circular no. DBR.No. Leg.BC.78/09.07.005/2017-18 dated July 06, 2017 limiting the liability of customers on unauthorized electronic banking transactions. 5.  Limiting  Customer  Liability  in  Unauthorized  Electronic  Banking  Transactions  in  PPIs  issued  by Authorised  Non-banks: RBI  has  issued  circular  no.  DPSS.CO.PD.No.1417/02.14.006/2018-19  dated January 04, 2019 limiting the liability of customers in unauthorized electronic banking transactions in PPIs issued by Authorised Non-banks. For  the  purpose  of  creating  awareness  RBI  is  holding  e-BAAT  program  at  various  locations  wherein audience are sensitised about safe digital payments. Also, a campaign named 'RBI Kehta Hai' is undertaken

6. through print and electronic media to create awareness in this regard.

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