RBI focuses on expanding UPI for cross-border payments

The Reserve Bank will continue to promote innovations in payment systems with soft touch regulations within regulatory guardrails and expand the reach of UPI for more efficient cross-border payments, Governor Sanjay Malhotra said on Monday.

In his address at the Inauguration of Digital Payments Awareness Week 2025 here, the governor said apart from the RBI, the government and other important stakeholders like banks and payment system operators have also taken a number of initiatives to encourage the adoption of digital payments.

"While these efforts have produced results, as visible in the huge growth of digital payments, there is still a lot more to be done. Going forward, we will work on three broad areas," he said.

The areas are soft-touch regulations to continue promoting innovation, promote awareness generation, and more efficient cross-border payments.

"We will continue to encourage innovation while promoting safety and security through soft touch regulations," the RBI chief said and added that the central bank has adopted a soft-touch approach to regulating the payments ecosystem and fintechs.

With these regulations, he said the RBI attempts to balance these divergent sets of expectations.

"Our approach has been to put in place regulatory guardrails within which all stakeholders are free to operate."

While mentioning that initiatives to encourage the adoption of digital payments have produced results, Malhotra said there is still a lot more to be done.

On cross-border payments, the governor said while in domestic payments, the success of UPI has propelled India to a leadership position with a share of 48.5 per cent in global real-time payments by volume, "we will endeavour to make cross-border payments more efficient".

As per a World Bank report, it has been estimated that in 2024, India received remittances totalling approximately USD 130 billion.

"We need to address the challenges of high cost, slow speed, and insufficient access and transparency in cross border payments...We will continue to expand the reach of UPI bilaterally by linking UPI with fast payment systems of other countries," Malhotra said.

The RBI will also explore the possibility of linking payment systems other than UPI to facilitate efficient cross-border payments.

"We will continue our engagement in a multilateral project called Project Nexus to enable instant cross-border retail payments," he added.

Malhotra further said though much progress has been made in the development, spread and adoption of digital payments, there is a lot of scope to further deepen and expand digital payments in the country.

In January 2025, more than 20 billion payments worth almost Rs 250 trillion were made in India through digital modes. Digital payments have become the preferred mode of payment for many of us.

"However, surveys have shown that nearly 40 per cent of our adult population still do not use digital payments. One of the main reasons for this is the lack of awareness or familiarity with using digital payments," he said.

The 5th Digital Payments Awareness Week (DPAW) is being observed from March 10 to 16.

DPAW is an initiative to highlight the impact and importance of digital payments and to create awareness about the safe usage of digital payment products.

Under the mission 'Har Payment Digital', the theme for the current year is 'India Pays Digitally'.

This theme reflects India's transformative journey toward a digitally empowered citizenry, with the ubiquity and convenience of digital payments, the RBI said.