RBI's Digital Payments Index

04.02.2025

RBI's Digital Payments Index

Why in the news?   

           The Reserve Bank of India’s (RBI) digital payments index (DPI) rose to 465.33 as of September 2024, compared to 445.5 in March 2024, reflecting the rapid adoption of digital payments in the country.

About RBI's Digital Payments Index:

• It is a first-of-its kind index to measure the spread of digital payments across the country. It has been constructed by the RBI.
• It was launched in January 2021.
• Base Year: It has been constructed with March 2018 as the base period, i.e., the DPI score for March 2018 is set at 100.
• The DPI index comprises five broad parameters that enable the measurement of deepening and penetration of digital payments in the country over different time periods. The parameters include:
  • Payment enablers (25 percent weightage in the index)
  • Payment Infrastructure Demand-side factors (10 percent)
  • Payment Infrastructure Supply-side factors (15 percent)
  • Payment performance (45 percent)
  • Consumer centricity (5 percent)
• Each of the parameters has sub-parameters, which, in turn, consist of various measurable indicators.

                                                         Source: Business standard

Consider the following statements regarding the RBI's Digital Payments Index:

Statement-I: It is constructed to measure the extent of digitisation of payments across the country.

Statement-II It has been constructed with March 2020 as the base year.

Which one of the following is correct in respect of the above statements?

A.Both Statement-I and Statement-II are correct, and Statement-II is the correct explanation for Statement-I.

B.Both Statement-I and Statement-II are correct, and Statement-II is not the correct explanation for Statement-I.

C.Statement-I is correct, but Statement-II is incorrect.

D.Statement-I is incorrect, but Statement-II is correct.

Answer C