Among other major developments, RBI proposed to enable an 'on-device' wallet in UPI applications to make small value transactions simpler and convenient.
Reserve Bank of India Governor Shaktikanta Das on Wednesday proposed to launch UPI-based payment products for feature phone users. The apex bank chief said that the innovation would leverage products from the RBI's Regulatory Sandbox on Retail Payments. Additionally, the RBI chief proposed to enable a mechanism of 'on-device' wallet in UPI applications. This, he stated, would make the process flow for small-value transactions simpler.
He also proposed to raise the transaction limit for payments through UPI for the apex banker's Retail Direct Scheme for investment in G-Secs from the current Rs 2 lakh to Rs 5 lakh.
Das highlighted concerns related to the reasonableness of various charges incurred by customers for digital payments via credit cards, debit cards, prepaid payment instruments, UPI, among others. "It is proposed to release a discussion paper on various charges in the payment system to have a holistic view of the issues involved and possible approaches to mitigating the concerns so as to make digital transactions more affordable," the Governor mentioned.
The government has been pushing the use of digital transactions in India since demonetisation in 2016. UPI transaction value crossed Rs 6 lakh crore in July 2021 and Rs 7 lakh crore in October this year. In November, the National Payments Corporation of India (NPCI) increased the cap for Meta (previously Facebook)-owned WhatsApp to allow 40 million users on its UPI platform, up from 20 million earlier.
"This move will permit UPI-based products to be available on feature phones and make an internet-free UPI payments system achievable in the future. This breakthrough will expand the penetration of digital payments across the country while also creating several new business opportunities in regions where they were previously inaccessible," Sunit Gajbhiye, founder and chief business officer of Financepeer, tells Outlook Money.
The RBI Governor read out the Monetary Policy Statement on Wednesday. The repo rate was kept unchanged for the ninth consecutive instance at 4 per cent. MSF and bank rate, too, were kept unchanged at 4.25 per cent.
The reverse repo rate, too, was kept unchanged at 3.35 per cent.
(With Inputs from Harsh Kumar)