Lok Sabha Question No. 1771 (UNSTARRED), answered on 2023-02-13
Subject: Promotion of Digital Payments
Ministry: FINANCE
Asked by: Bhartruhari Mahtab

## GOVERNMENT OF INDIA

## MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION No. 1771

ANSWERED ON MONDAY, FEBRUARY 13, 2023/ MAGHA 24, 1944 (SAKA)

## Promotion of Digital Payments

## 1771. SHRI BHARTRUHARI MAHTAB

Will the Minister of FINANCE be pleased to state:

(a)  whether  the  Government  is  providing  Banks  with  the  incentives  to  promote  digital payments to broaden and deepen alternatives to cash, if so, the details thereof;

(b) whether the Unified Payments Interface (UPI) is functioning as a Lynchpin transaction enabler has been key in undergirding the transformation, if so, the total monthly volume of UPI-faciliated transactions aggregated during the last one year;

(c) whether the banking sector is fully ready to leverage the payments ecosystem for its core business growth; and

(d) if so, whether Government is providing any incentive to Banks in this regard and if so, the details thereof?

## Answer

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR BHAGWAT KARAD)

(a)  to  (d)  For  promotion  of  digital  payments,  Ministry  of  Electronics  and  Information Technology (MeitY) has introduced the Incentive Scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions for the current financial year. The Scheme provides financial incentive to Banks for promoting point-of-sale (PoS) and e-commerce transactions using RuPay Debit Cards and person-to- merchant (P2M) transactions of low value (i.e up to Rs.2,000) on the BHIM-UPI platform. The Scheme also promotes UPI lite and UPI 123 PAY as economical and user-friendly digital payment solutions. MeitY has allocated Rs. 2,600 crore for the Scheme for FY 2022-23.

The incentive Scheme has promoted digital payments by incentivising Banks to build a robust digital payments ecosystem and to promote RuPay Debit Cards and BHIM-UPI as low-cost digital payments mode across all sectors and segments of population.

Banks are adopting latest digital technologies to provide their customers with enhanced and hassle-free banking services in a digital mode. Further, promotion of digital payment is one of  the  priorities  of  the  Government  to  facilitate  hassle  free  and  seamless  banking transactions for the people of the country.

Several initiatives have been taken by Government of India, RBI, NPCI and Banks, to promote digital transactions and to create awareness about digital payments in the country. Some of the initiatives are BHIM-UPI, UPI-123, Aadhar Payment Bridge, AePS etc.

As  a  result  of  the  various  initiatives  taken,  there  has  been  a  paradigm  shift  in  digital transactions in India which is reflected in terms of the increase in the volume of digital transactions over the last four financial years as illustrated below:

| Financial Year   |   Volume (In crore) |
|------------------|---------------------|
| 2018-19          |             2326.02 |
| 2019-20          |             3400.25 |
| 2020-21          |             4374.45 |
| 2021-22          |             7197.68 |

Source: RBI

As observed from the above table, there has been a growth of more than 200% in digital payment volume during the last four years since 2018-19. Further, as per the data sourced from National Payments Corporation of India (NPCI), UPI transactions registered in FY 21-22 were 45 billion, showing 8 times growth in last 3 years and 50 times growth in last 4 years. The month-wise data for the UPI transactions registered during the last year i.e 2022 is as under:

| Month   |   UPI Transactions Volume (In crore) |
|---------|--------------------------------------|
| Jan-22  |                              461.715 |
| Feb-22  |                              452.749 |
| Mar-22  |                              540.565 |
| Apr-22  |                              558.305 |
| May-22  |                              595.52  |
| Jun-22  |                              586.275 |
| Jul-22  |                              628.84  |
| Aug-22  |                              657.963 |
| Sep-22  |                              678.08  |
| Oct-22  |                              730.542 |
| Nov-22  |                              730.945 |
| Dec-22  |                              782.949 |

Source-NPCI