Digital payments space undergoing a silent revolution, says RBI Deputy Governor

Michael Debabrata Patra, Deputy Governor, Reserve Bank of India noted in a speech that the digital payments space is undergoing a silent revolution. In over 70 countries today, domestic payments reach their destination in seconds at near-zero cost to the sender or the recipient with the growing availability of instant payment systems (IPS). Deposit insurers are having to re-evaluate operational risks posed to depositors and member banks from the emergence of these 24/7 payment systems. While digital innovations can ease cross-border supply of financial services, they can also increase the likelihood of deposit insurers exposed to member banks with a significant share of non-domestic depositors and additional challenges in the case of a payout following bank default. In fact, the increasing ambit of cross-border banking activities makes cross-jurisdiction cooperation between deposit insurers and other financial safety net participants all the more relevant. The global financial landscape is changing rapidly. For deposit insurers and other financial safety net participants, it is a race to stay ahead of the curve amidst these tectonic shifts, he said.

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