Impact of National Payments Corporation of India in Promoting Cashless Transactions In Indian Economy

Abstract

Trading has expanded to a global market. As economy grows there is need to make advancements in payment technologies. Economic activities can be facilitated easily using the payment systems. There are many risks involved in making financial transactions. These are minimised by payment systems. Payment systems supports financial stability, manages liquidity and controls the monetary policy of the nation. In every country there will be a central bank which controls the commercial banks. In India, the banker s bank is Reserve bank of India. The most important function of RBI is the issuance of currency notes and coins. RBI also regulates the monetary policy of India. In India, payment instruments have evolved from precious metals like gold and silver to currency. Digital payment transactions avoid parallel economy. Cashless economy is an emerging concept in many countries. For Cash based transactions, consumer needs to make payments physically. Now trading is done online. Physical presence is not essential to buy and sell goods and services. Today s mode of payments includes card payments, digital funds transfers, internet banking etc. In India, the move towards a cashless society started since late 20th century. The development of information technology paved the way for many innovations and many payment instruments were introduced in India. New payment instruments like cheques, Debit and Credit cards emerged. After the introduction of New Economic policy in 1991, India became a global market. Private sector participation increased. The number of cash transactions increased. For consumers carrying cash was a very difficult task. So RBI established certain committees to study about payment systems. These committees helps and guides the use of Information and Communication technology for banking and payment systems. In order to make payments and settlements faster and flawless, the payment systems should be technologically advanced. Many reforms followed in banking sector. In 2007 with the support of government,RBI..