Digital payments risk to op stability, needing more IT funding: RBI dy guv

While widespread adoption of digital payments has facilitated rapid, low-cost transactions and easy withdrawals through banking and mobile apps, it has also heightened risks to operational stability, requiring continuous investments in IT systems and technology to handle peak loads effectively, said Swaminathan J, deputy governor, Reserve Bank of India (RBI), on Wednesday.

- SUBRATA PANDA

Speaking at the conference of the International Association of Deposit Insurers, the deputy governor highlighted that the 24/7 availability of online and mobile banking can increase vulnerabilities, potentially accelerating bank runs and liquidity crises during periods of stress, as customers may withdraw funds even outside of traditional banking hours and without having to visit a bank branch.

Further, these activities are amplified with the emergence of digital sources of influence, such as social media platforms, that have proved their ability to drive, disseminate financial information, adverse or otherwise, and trigger coordinated financial behaviour, he added.