{"id":41771,"date":"2024-07-30T05:46:07","date_gmt":"2024-07-30T00:16:07","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=41771"},"modified":"2025-10-13T12:10:37","modified_gmt":"2025-10-13T06:40:37","slug":"report-on-currency-and-finance-rcf-2023-24","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/report-on-currency-and-finance-rcf-2023-24\/","title":{"rendered":"Report on Currency and Finance (RCF) 2023-24"},"content":{"rendered":"<h2><strong>What\u2019s in today\u2019s article?<\/strong><\/h2>\n<ul>\n<li><strong>Why in News?<\/strong><\/li>\n<li><strong>India\u2019s Digital Revolution &#8211; Highlights of the RCF<\/strong><\/li>\n<li><strong>Significance of the Digitalisation in Finance in India<\/strong><\/li>\n<li><strong>Challenges Posed by the Digitalisation in Finance<\/strong><\/li>\n<li><strong>Remittances in India &#8211; Highlights of the RCF<\/strong><\/li>\n<li><strong>Way Forward for a Robust Digital Finance Ecosystem in India<\/strong><\/li>\n<\/ul>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>The Reserve Bank of India (RBI) released the Report on Currency and Finance (RCF) for the year 2023-24 with the theme &#8211; <strong>India\u2019s Digital Revolution<\/strong>.<\/li>\n<\/ul>\n<h2><strong>India\u2019s Digital Revolution &#8211; Highlights of the RCF:<\/strong><\/h2>\n<ul>\n<li><strong>India is leading the global digital revolution<\/strong>, emerging as a frontrunner on the back of its robust <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/daily-editorial-analysis\/\" target=\"_blank\">digital public infrastructure (DPI)<\/a>, rapidly evolving institutional arrangements, and a growing tech-savvy population.<\/li>\n<li><strong>Globally, India ranks first<\/strong> in biometric-based identification (Aadhaar) and real-time payments volume; second in telecom subscribers; and third in terms of the startup ecosystem.<\/li>\n<li><strong>The flagship <\/strong><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/upi\/\" target=\"_blank\">Unified Payments Interface (UPI)<\/a> has revolutionised the retail payment experience for end users, making transactions faster and more convenient.<\/li>\n<li><strong>In the digital currency arena<\/strong>, the RBI is at the forefront with pilot runs of the e-rupee, the <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/what-is-a-central-bank-digital-currency-cbdc\/\" target=\"_blank\">central bank digital currency (CBDC)<\/a>.<\/li>\n<li><strong>The digital lending ecosystem<\/strong> is becoming vibrant with initiatives such as the Open Credit Enablement Network, the Open Network for Digital Commerce and the Public Tech Platform for Frictionless Credit.<\/li>\n<li><strong>FinTechs are collaborating with banks<\/strong> and non-banking financial companies (NBFCs) as lending service providers.\n<ul>\n<li>They are also operating platforms to facilitate digital credit.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>Significance of the Digitalisation in Finance in India:<\/strong><\/h2>\n<ul>\n<li><strong>Paving the way for next-generation banking:<\/strong> For example, loans in the retail segment are being enabled by online payments and innovative credit assessment models with instant disbursements.<\/li>\n<li><strong>Innovations are making financial markets more efficient, integrated and inclusive: <\/strong>By &#8211;\n<ul>\n<li>Improving access to financial services at affordable costs;<\/li>\n<li>Enhancing the impact of direct benefit transfers (DBTs) by effective targeting of beneficiaries in a cost-efficient manner; and<\/li>\n<li>Boosting E-commerce through embedded finance.<\/li>\n<\/ul>\n<\/li>\n<li><strong>On the external front: <\/strong>Digitalisation is driving growth in India\u2019s services exports and lowering remittance costs.<\/li>\n<li><strong>Transforming DPI as a global public good: <\/strong>For example, the RBI has joined <strong>Project Nexus<\/strong> &#8211; a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic Fast Payments System (FPS).\n<ul>\n<li>As part of the project, the country\u2019s UPI and FPSs of Malaysia, Philippines, Singapore and Thailand will be interlinked through Nexus.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>Challenges Posed by the Digitalisation in Finance:<\/strong><\/h2>\n<ul>\n<li><strong>Customer protection: <\/strong>It presents challenges related to <strong>cybersecurity, data privacy, data bias<\/strong>, vendor and third-party risks.<\/li>\n<li><strong>Complex products and business models: <\/strong>Emerging technologies can introduce such models with risks that users may not fully understand, including the proliferation of <strong>fraudulent apps and mis-selling<\/strong> through dark patterns.<\/li>\n<li><strong>Human resource challenges: <\/strong>Digitalisation may induce human resource challenges in the financial sector, necessitating strategic investments in upskilling and reskilling.<\/li>\n<\/ul>\n<h2><strong>Remittances in India &#8211; Highlights of the RCF:<\/strong><\/h2>\n<ul>\n<li><strong>Highest remittance recipient in the world:<\/strong>\n<ul>\n<li>According to the World Bank, global remittances are estimated to have increased to US$ 857.3 billion in 2023.<\/li>\n<li>This is led by <strong>India (US$ 115.3 billion &#8211; <\/strong>accounting for 13.5% of the world total<strong>)<\/strong>, Mexico (US$ 66.2 billion), China (US$ 49.5 billion) and the Philippines (US$ 39.1 billion).<\/li>\n<li><strong>The cost of sending remittances<\/strong> globally has decreased over time, with digitalisation playing a key role.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Trends in India:<\/strong>\n<ul>\n<li>In 2021, <strong>more than half of India\u2019s inward remittances were from the Gulf countries<\/strong>, while North America accounted for 22% share.<\/li>\n<li><strong>The ratio of remittances to GDP<\/strong> for India has gradually increased from 2.8% in 2000 to 3.2% in 2023. It is now above that of gross FDI inflows to GDP ratio (1.9% in 2023), providing strength to India\u2019s external sector.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Future projections:<\/strong>\n<ul>\n<li>Going forward, India is poised to be the world\u2019s leading supplier of labour as its working-age population is expected to rise until 2048, while it has started dwindling for major advanced economies.<\/li>\n<li>This will propel remittances <strong>to around $160 billion in 2029 from $115 billion in 2023, <\/strong>and propel skill upgradation of the workforce<strong>.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>Way Forward for a Robust Digital Finance Ecosystem in India:<\/strong><\/h2>\n<ul>\n<li><strong>Regulatory and supervisory frameworks<\/strong> must scale up and become more sophisticated to balance financial stability, customer protection and competition.\n<ul>\n<li><strong>For example,<\/strong> the Government of India has introduced <strong>the Digital Personal Data Protection (DPDP) Act 2023<\/strong> to fortify the protection of personal data in the rapidly evolving digital landscape.<\/li>\n<\/ul>\n<\/li>\n<li>The goal is to balance effective regulation with fostering financial innovations in a safe, robust and trustworthy ecosystem.<\/li>\n<\/ul>\n<hr \/>\n<h3><strong>Q.1. What is the Open Network for Digital Commerce (ONDC)?<\/strong><\/h3>\n<p>ONDC is a private non-profit company established by the DPIIT of Government of India under the Companies Act 2013 in 2021. It seeks to promote an open e-commerce network that connects shoppers, platforms and retailers.<\/p>\n<h3><strong>Q.2. What is the Digital Personal Data Protection (DPDP) Act 2023?<\/strong><\/h3>\n<p>The DPDP Act 2023 provides for the processing of digital personal data in a manner that recognises both the right of individuals to protect their personal data and the need to process such personal data for lawful purposes.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.thehindu.com\/business\/india-at-forefront-of-digital-revolution-says-rbi-in-a-report\/article68460989.ece\" target=\"_blank\" rel=\"nofollow noopener\">India at forefront of digital revolution: RBI report<\/a> | <a href=\"https:\/\/rbidocs.rbi.org.in\/rdocs\/Publications\/PDFs\/RCF29072024D5F1960668724737AD152F783DB63F10.PDF\" target=\"_blank\" rel=\"nofollow noopener\">RBI<\/a> | <a href=\"https:\/\/www.thehindubusinessline.com\/money-and-banking\/remittances-to-india-could-rise-to-160-bn-by-2029-from-115-bn-in-2023\/article68460207.ece\" target=\"_blank\" rel=\"nofollow noopener\">HBL<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the RBI, India is leading the global digital revolution, emerging as a frontrunner on the back of its robust digital public infrastructure (DPI)<\/p>\n","protected":false},"author":5,"featured_media":41772,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-41771","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/41771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=41771"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/41771\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/41772"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=41771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=41771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=41771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}