RBI Governer Shaktikanta Das Highlights The Urgent Need For Digital Inclusion

At the G30 Annual International Banking Seminar, Shaktikanta Das, Governor of the Reserve Bank of India highlighted the certainty of digital money. In order to address the growing gaps in India, Shaktikanta Das pointed out the importance of digital inclusion. He acknowledged the difficulties underprivileged and marginalized populations encounter in obtaining digital payment systems like UPI, while simultaneously highlighting their potential.

Bridging the Digital Divide

Das noted that while India has achieved remarkable progress in digital payments, reporting approximately 500 million UPI transactions daily, there remains a significant segment of the population that lacks access to these services. He warned, “The more we expand the digital payment ecosystem, the greater the risk of widening the gap between those who have access and those who do not.” He cautioned that this widening gap could exacerbate existing economic inequalities, particularly for marginalized communities.

To reduce this risk, Das urged all parties involved, including the government, banks, fintechs and the tech industry to work together. He pushed for increased connectivity and digital literacy initiatives, emphasizing the value of teamwork in bridging the digital gap. Additionally, he pointed out that innovations in offline payment solutions are vital for reaching communities in remote areas with limited internet access.

Das noted that UPI has shown a great deal of promise for cross-border payments and that efforts have already started to connect India's UPI with the quick payment systems of nations like Singapore and Mauritius. These developments are expected to facilitate easier transactions for students, travellers, and businesses, thereby promoting economic inclusion on a broader scale.

The Role of CBDCs In Financial Inclusion

Digital inclusion is important for attaining equitable economic conditions and goes beyond simple technological growth, according to Das. He argued that the deployment of Central Bank Digital Currencies (CBDCs) could further enhance financial inclusion by facilitating government subsidies and payments directly to beneficiaries. He stated, “We see a great potential for financial inclusion, particularly for those who are currently unbanked.”

For CBDCs, the RBI has already started a pilot operation with the goal of testing and improving its security features and design before a national rollout. “CBDCs will provide an alternative payment method for transactions, thereby enhancing the resilience of the payment system," Das clarified. The coexistence of these two systems does not need to be questioned, he emphasized, adding that CBDCs might be a supplement to current payment systems like UPI. Transactions could go without hiccups if the CBDC serves as a fallback in cases where quick payment methods encounter technical difficulties.

Das also emphasized that the future of money is inherently digital, stating, “The future of currency will be digital. There is no escape from that.” He underscored that the drive for digital inclusion is not just about technology but also about empowering all citizens, particularly those who are marginalized, to participate fully in the digital economy.