25 August 2016. India achieved Big Target even though it was late as per timetable. But still, it is a significant achievement. RBI Governor Raghuram Rajan inaugurate the Mobile payment method, which makes your phone number your account. So what? Why is it important? Something similar is available in the US and other countries also.

I am trying to explain why the Unified Payment Interface is essential.

India is a country where not many people are under the banking system. Cash transactions are famous, and few people have credit or debit cards. Why think about a bank account? Many peoples don’t have a home, or the facilities are insufficient. The rural area situation is worse. No significant penetration of Banking. There are some banking finance companies, or You may call them Shadow Banking which are doing good. All because of it, many people are out of a financial system. They don’t have easy access to Debt. The retail debt market is nearly non-existent. One big seller dominates the wholesale Debt market—govt for whom RBI is doing all banking. Buyers are mainly banks, LIC, and some others.

There was less development because of less availability of Capital. One reason is domestic people are not keen, or it was not easy to do. Still today, many people INVEST in the insurance policy. But, as the rate of return is low, they hardly earn anything compared to inflation. Because of it, many people fall victim to Ponzi schemes.

All this makes the financial situation worse.

Then there was Raghuram Rajan. RBI Govr.

After Receiving The duty at RBI, He came up with the concept of Five Pillars. Financial Inclusion is an essential part of it. For that, he came up with different types of banks. He also set up a committee under Nachiket Mor. The committee advises on six pillar Strategy.

A Universal Electronic Bank account is a starting point for many things in finance like insurance and investment. Due to the Aadhar card, it is easy for all people to open a Bank account. RBI also Permits to set up of payment banks. Limited power but essential. RBI also permitted Peer to Peer Loan companies as NBFCs

And here comes the UPI into the picture

To make it easy to interact and make India less dependent on Cash, RBI came up with the concept.

It was not new. PayTM is doing it up to a specific limit; PingPay, Axis Bank application is also doing the same. They don’t need if you have a bank account for the transaction.

Say I want to send you money. But I don’t have your bank account details. Now? Simple. I will send you the amount with a link. Then, when you open the link on social media, you can easily keep That amount in your bank. Or I will send you coupons whenever you download the PayTM or any other applications you can use as you need.

RBI went one Step Ahead. UPI. The reason is simple.

India is a country where a smartphone is easy to find. After the success of the Aadhaar card, Pradhanmantri Jan Dhan Yojana makes it possible for many people to open their accounts.

Currently, 22 banks with some shocking names come up with the Application on the first day. However, more are supposed to join.

What is it?

A specially made application where you can create the account with your number and then Start payment with just your mobile number. It is not a regular bank application but is specially made for Cashless transactions.

Before writing this, I take the trial of the Union Bank UPI application. Not very much attractive like PayTM. But still useful. The best thing about the Application is with the help of a simple mobile number, and I will send money anywhere in the world. This makes your phone, bank, and bank account a big wallet.

You may check my view on UPI on my tweet.

https://twitter.com/androidashu/status/769141200980967424?s=09