Finance minister Nirmala Sitharaman the crucial role UPI plays in shaping the future of India’s banking sector.
She urged banks to leverage the digital footprints created by UPI to grow their business.
The FM highlighted that India accounts for 45% of all real-time payments globally and asked banks to seize this opportunity.
Finance minister Nirmala Sitharaman has called on Indian banks to use the digital footprints generated by the Unified Payments Interface (UPI) to expand their business prospects.
Speaking at the 90th Foundation Day of the Bank of Maharashtra in Pune on Thursday (19 September), Sitharaman emphasised the crucial role UPI plays in shaping the future of India’s banking sector.
“The potential for the Indian banking system rests a lot on this particular feature (creating digital footprints) of UPI… this feature actually gives us the advantage that you (banks) can plan for your future,” she said.
Sitharaman highlighted that India accounts for 45% of all real-time digital payments globally and urged Indian banks to seize this opportunity and deepen their digital payment services, noting that UPI is already being used in seven countries besides India. These countries include Bhutan, Nepal, Sri Lanka, Singapore, France, Mauritius, and the UAE.
The Indian government has been actively promoting UPI on the global stage. In July, the National Payments Corporation of India (NPCI) launched the ‘UPI One World’ wallet, enabling seamless payments for foreign tourists.
Additionally, India recently signed an agreement to extend UPI services to the Maldives, while discussions are ongoing to integrate UPI with Malaysia’s PayNet.
India’s efforts to expand UPI internationally are further backed by over 30 memoranda of understanding (MoUs) with various nations, as revealed by IT Minister Ashwini Vaishnaw last year.
NPCI International Payments Limited (NIPL), the global arm of NPCI, has also signed an agreement with the Bank of Namibia to develop a UPI-style digital payments system for Namibia.
As a result of these initiatives, UPI transactions have surged. In August 2024 alone, UPI transactions grew by 41% year-on-year, reaching 14.96 billion, while reporting a 3.6% increase month-on-month. While earlier today, it was reported that the NPCI is considering raising the market share cap for UPI apps from the proposed 30% to 40%.
