The Reserve Bank of India (RBI) is poised to revolutionize the digital banking landscape with the anticipated launch of interoperable internet banking in the current calendar year. Governor Shaktikanta Das made this announcement during the inaugural event of Digital Payments Awareness Week 2024 in Mumbai.
The Need for Interoperability
There is currently a lack of compatibility in online banking transactions handled by payment aggregators (PAs). In practical terms, this means that banks must integrate separately with each PA associated with different merchants. Consequently, delays occur in the actual receipt of payments due to the absence of standardized rules governing these transactions.
Approval and Implementation
NPCI Bharat Bill Pay Ltd. has already received approval from the RBI to establish an interoperable system. This move aligns with the central bank’s payments vision for 2025, which aims to enhance the efficiency and accessibility of digital payment systems.
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Benefits for Businesses and Consumers
- Streamlined Transactions: Interoperability will simplify transactions for businesses by allowing seamless connectivity between banks and payment aggregators. It eliminates the need for multiple integrations, reducing administrative overhead.
- Timely Payments: With an interoperable system, MSME and other entities can expect faster and more predictable payment cycles. This development is particularly crucial for small businesses operating on tight budgets.
- Enhanced Financial Inclusion: By promoting interoperability, the RBI aims to extend the benefits of digital banking to a wider population. Consumers will have greater flexibility in choosing their preferred payment methods.
India’s Digital Payments Landscape
With more than 46% of all digital payments made worldwide, India has become a global leader in this space.The Unified Payments Interface (UPI) has played a pivotal role, capturing an impressive 80% share of digital payments in 2023.
Looking Ahead
As the RBI continues its efforts to modernize the financial ecosystem, the launch of interoperable internet banking promises to be a game-changer. Businesses, consumers, and financial institutions eagerly await this transformation, which will foster greater efficiency, transparency, and financial inclusion.
Disclaimer: The information in this article is based on available data as of March 4, 2024. Readers are advised to stay informed about official announcements from the RBI.
News Resources : NDTV Profit