RBI Deputy Governor Michael Patra emphasized the importance of strengthening India’s financial institutions in a speech delivered at RBI-promoted Indira Gandhi Institute of Development Research’s alumni meet on Wednesday. He also talked about providing economic opportunities to the younger population and how it will lead to India emerging as an economic powerhouse.
In an alumni meet on Wednesday, Reserve Bank of India’s (RBI) Deputy Governor Michael Patra said that India is currently focusing on strengthening its financial institutions against third party risks, which include Big Tech and FinTech.
RBI is optimistic about setting up cross-border payments in the future which will be characterized by payment rails for instant money transfer. The Deputy Governor also added that in order to take advantage of the Indian demographic dividend, the country will have to provide economic opportunities to the younger population. Currently, only half of the working population is part of the labor force.
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India to establish payment rails for cross-border payments
RBI Deputy Governor Michael Patra was present at the alumni meet of RBI-promoted Indira Gandhi Institute of Development Research on Wednesday. There he highlighted that the primary objective should be to establish a secure connection among financial institutions.
In his speech, Patra said, “We aim to expand the narrative beyond financial stability and financial integrity concerns to capture the cross-sectoral and macro-financial implications and risks.”
Patra also added that RBI’s objective is to provide hassle free and instant cross border payment options to the public. He pointed out that India is preparing for the launch of digital rupee in the near future.
The efficiency of the digital rupee depends on internationalization of local payment modes through working with payment service providers that allow for QR code-based payments in Singapore and Bhutan.
The Deputy Governor further highlighted that India has always been a welcoming economy. Due to that international migration has been the primary force driving the country’s social, economical, and political relations with the world.
According to reports, Non-Residential Indians (NRIs) hold deposits in various local banks totaling up to 136 billion USD at the end of February, 2023. Also, as of April, 2023, the country’s foreign exchange reserves stand at 588 billion USD.
India needs to provide economic opportunities to the younger generation in order to emerge as an economic powerhouse
In his speech, Patra also talked about how significant it is for the Indian economy to provide economic opportunities to the up-and-coming generation and how important it is for the country to prioritize its labor force skilling strategy.
The country’s median age is 28, and by the year 2050, it will contribute up to one-sixth of the world’s working population.
Patra added that in the future India has the opportunity to emerge as an economic powerhouse and that the country is on track to becoming the second largest economy in the world by the year 2048.
In order to take advantage of the opportunity, India will have to work proactively towards establishing itself in the global scenario and appropriately training its humongous workforce.
The Deputy Governor constantly stressed throughout his speech that how important it is to provide the youth with suitable economic opportunities, since currently only half of the working population is part of the labor force.
India also has the lowest participation of females in the workforce, even lower than some of the low-income countries. Women should be assured of the dignity of being a part of the labor force and be encouraged to step-out into the workforce.
