India’s banks are making $64 billion from a freebie

Customers pay nothing for choosing a popular cashless option, and yet the country now rivals Japan in payment revenue

Drumroll please! UPI has just shattered records with an astonishing 10 billion plus transactions. Join us in celebrating this incredible milestone and the power of digital payments. Let's keep the momentum going and continue to revolutionize the way we make transactions with UPI!. NPCI, which run the payment system, said on social media platform 'X', formerly known as Twitter.

UPI is a popular payments platform that currently handles 75 per cent of digital retail payments in India.

India's state-run banks are expected to generate nearly $2 billion in dividends for the government in the next fiscal year, marking a significant increase from this year. Prime Minister Narendra Modi's efforts to strengthen state banks, including mergers and a bankruptcy law, have contributed to their improved financial performance. State banks are projected to have net profits exceeding $12 billion in the current fiscal year, driven by strong credit demand.

India has signed agreements with more than two dozen countries to expand UPI beyond its borders. The expansion will help Indians living abroad to send remittances home or for Indian travellers to transact with local merchants.

In October, the National Payments Corporation of India reported a record-breaking 11.41 billion UPI transactions, totaling Rs 17.16 lakh crore, driven by the festive season and increasing consumer adoption of UPI for secure and convenient mobile payments.

Digital India: According to NPCI, the overall volume of transactions also registered a growth of 58% year-on-year. The total amount of the UPI transactions for May was Rs 14.30 lakh crore, up 37% from the previous year.

While the National Payments Corporation of India (NCPI) limited daily transactions to 20 and a maximum amount of ₹1 lakh in 2021, individual banks and apps have set their own limits, creating a complex system of restrictions. UPI transactions have witnessed a tremendous increase in volume, but the value per transaction has decreased over time. UPI has surpassed other payment instruments in terms of volume, accounting for over 73% of retail payments in 2022-23. However, banks are struggling to cope with the surge in UPI payments, leading to transaction failures.

India on May 30 extended its $1 billion credit line to Sri Lanka by another year to help the island nation hit hard by an unprecedented economic crisis procure much-needed food, medicine and other essential items. An agreement was signed between the State Bank of India (SBI) and the Sri Lankan government for $1 billion credit facility in March last year.

Revenue in India grew by nearly 50%, from $4.1 billion a year earlier, according to a person familiar with the matter, who asked not to be named as the information is not public.