India at the Forefront of Digital Revolution: RBI’s Patra

 Mumbai: India is at the forefront of the digital revolution and financial technology is speeding up digital payments, the Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra said on Wednesday.

Patra in his inaugural address at the DEPR Conference on 'Digital Technology, Productivity and Economic Growth in India' said that the country is uniquely positioned to unlock new growth avenues and optimise existing ones with its digital public infrastructure (DPI), a vibrant information technology (IT) sector and a burgeoning youth population, including one of the largest AI talent bases he said.

It is estimated that the digital economy currently accounts for a tenth of India's GDP, he said, adding that going by growth rates observed over the past decade, it is poised to constitute a fifth of GDP by 2026.

According to estimates, Generative AI will contribute $359-438 billion to India’s GDP by 2029-30. Indian firms' integration of AI into production processes has increased from 8 percent in 2023 to 25 percent in 2024. India has also committed Rs 1.25 lakh crore towards its semiconductor industry development.

Patra said that micro-level evidence from surveys of Indian banks shows that while all of them have implemented mobile and internet banking, 75 per cent offer online account opening, digital KYC, and digitally enabled doorstep banking. Additionally, 60 per cent provide digital lending, 50 per cent offer payment aggregator services, 41 per cent use chatbots, 24 per cent have adopted open banking, and 10 per cent have integrated Internet of Things (IoT) technology. Private sector banks are leading this technology adoption.

An AI-assisted review of the latest annual reports of Indian banks reveals various instances of productivity gains by scheduled commercial banks from digitalisation. Examples include monthly savings of 14,500 person-days, 25-30 per cent decline in customer acquisition costs, reduction of the use of 84 tons of paper, saving of four lakh litres of fuel in commutes to banks by customers, 40 per cent reduction in customer wait times at branches, 50 per cent reduction in the compliance monitoring time and shortening account opening time to less than a day.

Digitalisation is also transforming the efficiency of public services. In 2024, the average number of daily e-transactions to access public services has increased by 56 per cent (y-o-y). During 2023-24, Rs 6.9 lakh crore has been transferred through the digitally powered Direct Benefit Transfers (DBT) under 314 schemes benefiting 176 crore beneficiaries. Over the years, these DBTs have resulted in estimated cumulative cost savings of Rs 3.5 lakh crore up to March 2023.