Mumbai, Jan 28: The share of the Unified Payments Interface (UPI) in India’s digital payments has surged from 34 per cent in 2019 to an impressive 83 per cent in 2024, with a remarkable CAGR (cumulative average growth rate) of 74 per cent over the last five years, according the RBI’s payment system report.

In contrast, share of other payment systems like RTGS, NEFT, IMPS, credit cards, debit cards, etc. in digital payments volume declined from 66 per cent to 17 per cent during the same period, the report states.

UPI has been the most significant contributor to the growth of digital payments in India due to its usefulness and ease of use, the report points out.

At a macro level, the volume of UPI transactions increased from 375 crore in 2018 to 17,221 crore in 2024, whereas the total value of transactions surged from ₹5.86 lakh crore in 2018 to ₹246.83 lakh crore in 2024.

This amounts to five year CAGR of 89.3 per cent and 86.5 per cent in terms of volume and value, respectively, the report states.

Both P2P (person-to-person) and P2M (person-to-merchant) transactions leverage UPI’s secure and real-time payment capabilities, making it easier for individuals and businesses to execute financial transactions without relying on traditional, time-consuming methods.

The UPI P2M transaction volume has surpassed the UPI P2P transaction volumes since 2023, however, in value terms, the UPI P2P transaction value is still higher than UPI P2M transaction values.

Over the past few years, digital payments in India have witnessed a phenomenal growth buoyed by the spectacular progress of UPI and the plethora of digital payment options available. In 2024 alone, India recorded 208.5 billion digital payment transactions.

UPI P2M grew at a CAGR of 99 per cent for transaction values below Rs 500 over 2019-24. In contrast, UPI P2P grew at a CAGR of 56 per cent during the same period.

For higher ticket-sized transactions — those exceeding Rs 2,000 — UPI P2M grew at a CAGR of 109 per cent during the same five-year period, while UPI P2P recorded a CAGR of 57 per cent.

The National Payments Corporation of India’s (NPCI) low-value transaction payment method, UPI Lite, recorded 2.04 million transactions daily, valued at Rs 20.02 crore in December 2024.

“When Paytm and PhonePe introduced UPI Lite on February 15, 2023, and May 2, 2023, respectively, a sustained increase in UPI Lite payment volumes and values was observed,” the RBI report observes.

“UPI has propelled India to the forefront in the provision of digital payment solutions as ‘public good’. This public good approach has the potential to be adopted by other economies, whatever stage of development they are at. UPI and its features bear lessons on democratisation of the payment system to the smallest value and penetration of digital payments to previously unreached segments,” the report added.

Mumbai, Jan 27: Indian equity markets witnessed a sharp decline on Monday amid weak global cues and uncertainties over US trade policies which dampened domestic investors’ sentiment.

At the closing bell, the BSE Sensex shed 824 points or 1.08 per cent at 75,366, while the NSE Nifty50 slipped 263 points or 1.14 per cent at 22,829.

On the 30-stock Sensex, only six stocks managed to stay in the green. ICICI Bank led the gainers with a 1.75 per cent rise, followed by the SBI, Hindustan Unilever, Asian Paints, UltraTech Cement, and Maruti Suzuki India.

However, the majority of stocks faced losses like Zomato, Tech Mahindra, HCLTech and Tata Motors.

Similarly, on the Nifty50, 10 stocks traded higher. Britannia Industries emerged as the top gainer, rising 1.93 per cent, followed by ICICI Bank, Hindustan Unilever, Larsen & Toubro and Nestle India.

On the losing side, Bharat Electronics Limited (BEL) dropped 2.68 per cent, followed by HCLTech, JSW Steel and Trent.

Sectoral performance was largely negative. The Media index led the losses, falling 3.83 per cent, followed by the Pharma index, which declined 2.35 per cent, and the IT index, which shed 2.19 per cent.

The only exception was the PSU Bank index, which ended the day by showing a marginal gain of 0.12 per cent.

Broader markets experienced even sharper losses. The Nifty Midcap 100 fell 2.25 per cent, while the Nifty Smallcap 100 tumbled 3.51 per cent.

According to Rupak De of LKP Securities, the index slipped from its recent consolidation on the daily chart, heightening pessimism across the Indian equity market.

“Sentiment is likely to favour bearish trades in the short term, particularly as long as the index remains below 23,000. On the lower side, the prevailing weakness could potentially lead to a decline toward 22,500,” he mentioned.

Meanwhile, Asian markets saw mixed reactions. Hong Kong’s Hang Seng Tech Index rose 2 per cent, but Japan’s Nikkei 225 futures dropped 0.6 per cent.

India’s volatility index, the India VIX, climbed 7.36 per cent to 17.98.

Gold experienced volatile trading as the first session of the week saw profit booking, with Comex gold encountering resistance near $2,770 but maintaining strong support around $2,750, showcasing resilience to break below that level.

Mumbai, Jan 24: The Reserve Bank of India (RBI) has got in touch with banks this week to understand the impact of its new liquidity coverage norms following concerns that the move would adversely impact the flow of credit in the economy.

Banks have provided some feedback, asked for deferment of the norms and alternative mechanisms to cope with the likely hit from these norms.

The move has been initiated at a time when Sanjay Malhotra has just taken over as the new Governor of the RBI succeeding Shaktikanta Das, who completed an extended tenure as head of the central bank in December.

Liquidity has already turned tight as the banking system was facing a deficit of over Rs 3 lakh crore on Thursday despite the daily variable repo rate auctions that the RBI has started carrying out last week.

The RBI had on July 25 issued a draft circular which will require banks to set aside more funds to cover their risks from April 1 this year.

The RBI said banking has undergone rapid transformation in recent years. While increased usage of technology has facilitated the ability to make instantaneous bank transfers and withdrawals, it has also led to a concomitant increase in risks, requiring proactive management. It has reviewed the Liquidity Coverage Ratio (LCR) framework to increase the resilience of banks.

Banks have been directed to assign an additional 5 per cent funds as a run-off factor for retail deposits which are enabled with Internet and Mobile Banking facilities (IMB). Stable retail deposits enabled with IMB shall have 10 per cent run-off factor and less stable deposits enabled with IMB shall have 15 per cent run-off factor.

LCR requires banks to maintain sufficient high-quality liquid assets (HQLAs), comprising mainly government securities, to manage a potential liquidity crunch due to any sudden withdrawals of funds. The RBI has rejected the request of banks to include their existing cash reserve ratios to estimate HQLAs.

According to treasury officials of banks, this would in effect mean over Rs 4 lakh crore would have to be diverted from banks to buy government bonds instead of extending credit to corporates and individuals to demand in the economy.

Banks have also sounded the finance ministry on the need for easing the stringent RBI guidelines which are likely to hit credit growth.