RBI Deputy Governor Shirish Chandra Murmu has dismissed concerns that the new Merchant Discount Rate (MDR) on UPI payments above Rs 2,000 will increase cash transactions. He also clarified the 'cash paradox' of rising digital payments alongside cash in circulation, explaining cash's dual role. Murmu further detailed the RBI's extensive regulatory changes aimed at reducing compliance burdens and emphasised that accountability for AI-driven decisions in finance will remain with institutional boards.
Reserve Bank Deputy Governor S C Murmu has highlighted the "cash paradox" where currency in circulation continues to grow despite a significant increase in digital payments. This trend complicates the RBI's forecasting and planning for currency production and distribution, prompting the central bank to seek solutions and explore ways to extend banknote life and reduce the carbon footprint of the cash cycle.
RBI Deputy Governor S C Murmu stated that the introduction of merchant discount rate (MDR) on UPI transactions is unlikely to cause a shift back to cash, despite some concerns, emphasising that MDR will help the payments ecosystem recover costs.
'... that work is done. The task is to reallocate what has been built, with the courage of a founder and the discipline of an owner.'
The hoarding of cash accentuated from the very start of 2020, when the coronavirus pandemic started taking hold the world over, and fear of the pandemic prodded people to remain liquid for emergency use.
'That one of Delhi's busiest crossings, within a stone's throw of Lutyens' habitat, should be hostage to the mercy of hoodlums, who think nothing of attacking and thieving in plain sight of thousands of commuters without dread of reprisal, is scary,' says Kishore Singh.
M Muneer recommends segmenting the population on the basis of their propensity to embrace new technologies is the key to driving digitisation.
In a recent lecture, RBI governor Raghuram Rajan dished out some frank advice -- don't get into 'jugaad', instead try for the long haul. Only that will sustain in the long-run.
Once these banks start showing losses, they will not be able to pay dividends to the government nor pay taxes, which will further aggravate the situation for the government as its return on investment as an investor would be very negligible for the next few years, says M V Subramanian.
India is experiencing jobless growth and skepticism abounding that the country may not be able to cash in on its demographic bonus
FM needs to convince Indians to invest more in stocks.
