UPI Best Payments System: RBI Open to NPCI Rival

Mumbai, Jan 11 (PTI) Reserve Bank Governor Shaktikanta Das on Thursday dismissed criticism from certain quarters that after the huge success of UPI, its creator NPCI has become a monopoly and asserted that there is more room for the payment app to grow and it can become the world leader in payments.

Unified Payments Interface or UPI, developed by National Payments Corporation of India (NPCI), has been a runaway success and is already operational in some countries, including Singapore and the UAE.

Its monthly volume in the country crossed the 100-billion mark many months ago. RBI is in discussion with more central banks in other countries.

Dismissing the criticism that NPCI, set up by RBI and other financial institutions, has become a monopoly, he said, it is the best creation.

Das was speaking at a BFSI seminar organized by business daily Mint.

"UPI has already become a digital public infrastructure. In fact it has to grow even further. I would say this is the best payments system in the world as of now and I wish it becomes the world leader in it," he said.

However, he said, RBI is not averse to having a rival to NPCI, and in fact it had sought applications for the same. But, none of the proposals that have come to them so far have had anything new to offer.

"If fact, all the proposals looked almost a copy of what NPCI is already doing with some minor modifications...So we haven't taken an official view and as and when we do that we will clear our stand on the idea of creating a rival to NPCI," Das said.

To a query on the Central Bank Digital Currency (CBDC), which is RBI's answer to the private digital currencies, Das said, RBI is working on the programmability of the digital rupee so that it can be used for specific payments like government subsidies or cash payouts.

"Currently, we are moving towards money market operations (in the wholesale CBDC area) and slowly we will be adding new segments and areas where CBDC operations will do. It's a pilot project. We are in no great hurry because after all we are creating a new currency system," he said.

"On the retail side, for example, we are working on the programmability of CBDC. For example, when it comes to the government's cash transfers to farmers or other people, can it be programmed in such a manner that it can be used only for that purpose where the end-use is clearly defined by the person who is sending the money. That is one area which we are working on," the governor explained.