The Reserve Bank of India's digital payments index (DPI) in March 2021 rose to 270.59, compared to 207.84 for March 2020, indicating a robust growth in digital transactions during the COVID-hit year in the country. The central bank announced the construction of the composite Reserve Bank of India (RBI) – Digital Payments Index (RBI-DPI) with March 2018 as the base period to assess the extent of digitization of payments in the country.
The index was set as 100 in March 2018 (the base period) and it stood at 153.47 in March 2019. While in September 2020, the index stood at 217.74. In a statement on Wednesday, July 28, RBI said that the RBI-DPI index has demonstrated significant growth in the index representing the rapid adoption and deepening of digital payments across the country in recent years.
The index - RBI-DPI comprises five broad parameters which allow the measurement of the extent and penetration of digital payments in the country across different time periods. The five parameters are as follows:
- Payment Enablers (weight 25 per cent)
- Payment Infrastructure – Demand-side factors (10 per cent)
- Payment Infrastructure – Supply-side factors (15 per cent)
- Payment Performance (45 per cent)
- Consumer Centricity (five per cent)
These parameters have sub-parameters that consist of measurable indicators for the penetration of digitisation. Payment enablers such as bank accounts, Aadhaar, mobile, internet, among others constitute 25 per cent of the overall index.
The digital payments index is also a measure of calculating the growth of the country's cashless economy for the government. Earlier this year, the RBI stated that the DPI for March 2019 and March 2020 work out to 153.47 and 207.84 respectively, indicating an appreciable growth. Going forward, the RBI-DPI will be published on the RBI's website on a semi-annual basis from March 2021 onwards with a lag of four months.