Raghuram Rajan will soon step down as the 23rd RBI Governor. During the three years of his term, he has introduced and implemented major reforms in the banking sector. From converting the Reserve Bank of India into an inflation targeting central bank to forcing a long overdue clean up of the banking sector, Rajan’s three year term has led to significant development.
“While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on September 4, 2016. I will, of course, always be available to serve my country when needed,” Rajan has said in a message to the staff of the central bank while gracefully announcing his resignation in the most gentlemanly way possible.
In this article I would like to highlight some of the major technological revolutions that he brought about in the banking sector. These are UPI, BBPS and the Cashback System.
The Unified Payment Interface (UPI) is a payment system that is directly linked to achieving the goals of universal electronic payments, a less-cash society, and financial inclusion, using the latest technology trends. The National Payments Corp. of India (NPCI), which was set up in April 2009, undertook the task of implementing a UPI to simplify and provide a single interface across all systems. Now comes the BBPS or Bharat Bill Payment System. The prevalent payment system had inefficiencies as each payment processor had to independently tie up with a bill generator which caused wastage of time and effort. Under the new system bill generators could be connected to a centralized system, the BBPS. Cashback was also introduced by Rajan to revise and modify the PPI (Payment Protection Insurance). The guidelines allowed functioning of mobile wallets, paper vouchers, smart cards and internet accounts whose products are the Freecharge, Paytm and Citrus Wallets of the world. Rajan also believed that by studying social media, a lot of information could be gathered about consumer preferences, tastes, habits and trends.
Raghuram Rajan will always be revered as the one of the most competent Governors of the RBI and a major contributor and revolutionary of the banking sector.