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Adoption of digital currency paves way for cross-border payments: RBI Governor

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RBI Governor says, adoption of digital currency will pave the way for faster, more efficient, and cost-effective cross-border payments

In Maharashtra, Governor of Reserve Bank of India (RBI) Shaktikanta Das Yesteray said that the Indian Banking sector has emerged stronger from the unprecedented challenges of recent years. Addressing the Mint BFSI Summit in Mumbai, Mr. Das said the Banking sector is well-placed to support India’s growth story.

Reeling from a host of issues including high levels of non-performing assets followed by the COVID-19 pandemic, the RBI Governor said banks have emerged stronger due to a series of initiatives taken by the Apex bank on the regulatory and supervisory front besides the banks responding positively by strengthening their internal defence mechanisms.

He added that all key indicators of scheduled commercial banks, namely, capital adequacy, asset quality and profitability have shown improvement in the last four years. He added that the financial indicators of non-banking financial companies are also in line with that of the banking system as per the latest available data.

Stating that there is a lot of interest from other countries in India’s Central Bank Digital Currency or the digital rupee, Mr. Das said the adoption of CBDCs would pave the way for faster, more efficient, and cost-effective cross-border payments.

The RBI Governor said the Central bank is working on the programmability of the digital rupee so that it can be used for specific payments like government subsidies or cash payouts.

On the Unified Payments Interface, Mr. Das said UPI has already become a digital public infrastructure. He said that UPI is the best payment system in the world as of now and is in line to become a world leader.

On the issue of cryptocurrency, the RBI Governor maintained that the Central bank will not emulate others on cryptocurrency regulations. Stating that what is good for another market need not be good for India, Mr. Das said travelling down that path will create huge risks.

Replying to a question on whether he sees the forthcoming vote-on-account to be inflationary, the RBI Governor replied in the negative, adding that the Government has taken many supply-side measures to contain price rise since the beginning of the Russia-Ukraine war.

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