In value terms, the growth of Cashless transactions moderated to 13.2 per cent in 2025-26 from 17.3 per cent in the previous year.
FinTech BizNews Service
Mumbai, 31 May 2026: The Reserve Bank of India released its Annual Report for 2025-26, a statutory report of its Central Board of Directors. The Report covers the working and functions of the Reserve Bank of India for the period April 2025 - March 2026.
DEPARTMENT OF PAYMENT AND SETTLEMENT SYSTEMS (DPSS)
During the year, DPSS undertook several initiatives in line with Payments Vision 2025 across the pillars of integrity, inclusion, innovation, institutionalisation, and internationalisation.
Payment Systems
Cashless transactions recorded a robust growth of 26.8 per cent in terms of transaction volume during 2025-26, following an expansion of 34.8 per cent in the previous year. In value terms, the growth moderated to 13.2 per cent in 2025-26 from 17.3 per cent in the previous year.
Digital Payments
During 2025-26, transactions processed through the Real Time Gross Settlement (RTGS) system increased by 15.7 per cent in volume terms and 12.9 per cent in value terms. Retail payment transactions recorded an increase of 26.8 per cent in volume terms and 14 per cent in value terms during the year.
UPI continued to account for the largest share in retail payments, contributing nearly 86 per cent of total retail payment transactions during the year. UPI transactions increased by 30 per cent in volume terms and 20.6 per cent in value terms.
Authorisation of Payment Systems
During the year, the Reserve Bank accorded authorisation to 23 non-bank Payment Aggregators (PAs), four non-bank prepaid payment instrument (PPI) issuers, and one Interoperable Mobile and Net Banking operator.
Agenda for 2025-26
For 2025-26, the Department had outlined the following objectives:
● To assess evolving trends, adoption patterns and user preferences in India’s digital payments ecosystem through a nationwide ‘Survey on Usage of Digital Payments’ with a view to supporting evidence-based policy making;
● To strengthen safeguards against digital payment frauds by establishing a Digital Payment Intelligence Platform (DPIP), leveraging advanced technologies for real-time identification of suspicious transactions;
To frame Payments Vision 2028, building on the achievements of earlier vision documents and providing further impetus to the digital payments’ ecosystem; and to work towards identifying frictions in processing of beneficiary leg of cross-border payments and framing suitable regulatory policy/action in consultation with the relevant stakeholders in India.
Implementation Status
The Reserve Bank conducted a ‘Survey on Usage of Digital Payments’ covering more than 30,000 users and 10,000 merchants spread across the country. The survey indicated that 52 per cent of users had adopted digital payments, primarily driven by speed and convenience. Adoption varied across parameters like age, income, gender and location indicating scope for policy action. Among merchants, 67 per cent reported accepting digital payment modes, with a majority indicating a positive impact of the same on business operations. UPI emerged as the predominant payment mode both in terms of usage and acceptance.
The first phase of the DPIP prototype - namely, the establishment of the Smart Registry - has been operational since August 2025.
The Reserve Bank issued ‘Payments Vision 2028’ on March 27, 2026, outlining its strategic priorities for digital payments up to December 2028.
To examine frictions faced in timely credit of inward cross-border payments to beneficiary accounts, a draft circular was issued for public consultation on October 29, 2025. Inputs received from the public were examined, and circular was issued on April 9, 2026.
Digital Payments Index (DPI)
The Reserve Bank’s DPI (RBI-DPI), computed semi-annually, continued to exhibit strong growth, reflecting rapid adoption, and deepening of digital payments across the country.
Agenda for 2026-27
In 2026-27, the Department will focus on the following goals:
● The second phase of DPIP, involving the development of artificial intelligence (AI) and machine learning (ML) based risk-scoring platform, is currently under process and is envisaged to be completed during the year;
● To address the continuing challenge of authorised push payment frauds - where customers themselves initiate payments despite the various safeguards already in place such as mandatory additional factor of authentication (AFA), payee name lookup, card controls, tokenisation, and related measures, introduction of certain frictions in digital payment processes would be explored, with a view to enhancing customer protection and facilitating more effective recovery of funds;
● Switch on and switch off facility for domestic and international card transactions is available to customers which has helped customers exercise greater control. Introduction of a similar facility for all digital payment modes shall be explored along with a ‘kill switch’ to block all debits from the account in one stroke. This facility would help bolster consumer confidence and contribute towards controlling frauds in digital payment transactions;
● To reduce settlement risk and expedite transaction timelines through central bank money settlement, the Reserve Bank will explore granting direct RTGS and NEFT access to more categories of entities;
● To continue efforts to increase and deepen the penetration of digital payments, particularly in rural and semi-urban areas, to ensure last-mile connectivity and inclusive access; and
● To continue efforts to further expand the linkage of UPI with the fast payment systems of strategic partner jurisdictions, with a view to enabling seamless, secure, and cost-effective cross-border remittances as well as merchant payments (Utkarsh 2029).
