From UPSC perspective, the following things are important :
Prelims level : Various parameters of the index
Mains level : Digital banking in India
The RBI has constructed a composite Digital Payments Index (DPI) with March 2018 as the base period to capture the extent of digitization of payments across the country.
Note various indicators of the DPI.
Digital Payments Index
- RBI-DPI will be published on the central bank’s website on a semi-annual basis from March 2021 onwards with a lag of four months.
- It comprises five broad parameters that enable the measurement of deepening and penetration of digital payments in the country over different time periods.
- The parameters are:
- Payment enablers (weight 25 percent)
- Payment infrastructure–demand-side factors (10 percent)
- Payment infrastructure – supply-side factors (15 percent)
- Payment performance (45 percent) and
- Consumer centricity (5 percent)
- Each of these parameters has sub-parameters which, in turn, consist of various measurable indicators, RBI said.
Why need such an Index?
- Digital payments in India have been growing rapidly.
- The DPI reflects accurately the penetration and deepening of various digital payment modes.