Mobile fund transfer platform by July end

Hyderabad: Reserve Bank of India Governor Raghuram Rajan on Monday said Unified Payments Interface (UPI) would be launched by July end to make fund transfers between bank accounts easier through smartphones.

Delivering key note address at the Banking Technology Excellence Awards function organised by Institute for Development and Research in Banking Technology (IDRBT), the RBI chief also underlined the need for offering tax benefits to merchants for encouraging cashless transactions.

"I am especially enthused by UPI, as smartphones become more widely available. Transfers from bank account to bank account will become easier in a few weeks via smartphone through the Unified Payment Interface," the Governor said. Elaborating, Rajan said a villager needing to pay a shopkeeper only needs to know the latter's alias - say [email protected] to transfer funds.

"Neither needs to visit the bank to take out or deposit money, no point of sale machine is needed. With the price of smartphones falling sharply, we are on the verge of solving the last-mile problem," he said. The Governor said that despite the huge potential, activation rates and usage levels of electronic payment services remain at low levels though growth is picking up.

"No doubt, the fear of taxation as payments move from cash to electronic plays a part in dampening activity. As information technology brings down the possible space to avoid or evade tax, and as the benefits. I have no doubt that merchants will push more for electronic payments," he said.

Some tax benefits to those merchants who show increases in digital transactions, and perhaps innovative ways to encourage customer participation, may be beneficial, he added. Rajan also stressed on the importance of systems that offer security of transactions even to the unsophisticated user and do not place a huge burden of care on them.