E-BANKING MANAGEMENT IN INDIA

Electronic-banking use of computers and telecommunications to enable banking transactions to be done by telephone or computer rather than through human interaction. Its features include electronic funds transfer for retail purchases, automatic teller machines (ATMs), and automatic payroll deposits and bill payments. Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India (NPCI). The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions. UPI is powered by Immediate Payment Service (IMPS). It is regulated by the Reserve Bank of India (RBI) and works by instantly transferring funds between two bank accounts on a mobile platform. As of February 2022, there are 304 banks available on UPI with a monthly volume of 4.52 billion transactions and a value of Rs. 8.26 lakhcrore (US$110 billion). UPI witnessed 68 billion transactions until November 2021. The mobileonly payment system helped transact a total of Rs. 34.95 lakh crore (US$460 billion) during the 67 months of operation starting from 2016. As of May 2021, the platform has 15 crore (150 million) monthly active users in India. The proportion of UPI transactions in total volume of digital transactions grew from 23% in 2018-19 to 55% in 2020-21 with an average value of Rs. 1,849 per transaction. There were digital transactions worth Rs. 8.31 lakh crore in January 2022 via the platform.In FY 2022, the UPI crossed transactions worth $1 trillion.

- Dr. Morusu Siva Sankar

History 

In April 2009, the National Payment Corporation of India was formed with the objective to integrate all the payment mechanisms available in the country and make them uniform for retail payments. By March 2011, RBI found out that in India only six non-cash transactions happen every year per individual citizen while 10 million retailers accept card-based payment. Around 145 million families have no access to any form of banking. There is also the problem to tackle black money and corruption that happens mostly in cash.

RBI in 2012 released a vision statement for a period of four years that indicated commitment towards building a safe, efficient, accessible, inclusive, interoperable and authorized payment and settlement system in India. It is part of the Green Initiative to decrease the usage of paper in domestic payments market. UPI was officially launched in 2016 for public use.

Under RBI guidance, NPCI became the primary body with the task to develop a new payment system that is simple, secure, and interoperable. UPI works on four pillar push-pull interoperable model where there will be remitter/ beneficiary front end PSP (payment service provider) and remitter/beneficiary back end bank that settles the monetary transaction for the users. As per CEO of Netmagic Solutions, UPI became one of the most successful deep-tech innovation coming out of India.

In December 2019, noting the success of UPI, Google suggested to the US Federal Reserve Board the development of FedNow, a real-time payment system for United States.

With exponential growth of UPI, India became the world's largest real-time payment market with 25.50 billion annual transactions in 2020 as per data from ACI Worldwide and GlobalData leaving behind China and United States.