Kamal Ghorui
MUMBAI: The standing committee on finance has flagged concerns over the financial sustainability of digital payments, gaps in formal lending, cybersecurity weaknesses in banks, and declining insurance penetration in its 32nd report presented in March 2026 while examining the “demands for grants (2026-27)” for the Department of Financial Services (DFS)under the finance ministry.The committee, which examines the budgetary demands and policies of the ministry, reviewed the overall functioning of the DFS, the nodal department for banking, insurance and other financial services.The panel raised concerns about the sustainability of digital payments and warned that rapid growth of the Unified Payments Interface requires a viable revenue model. It observed that “the sustained expansion of UPI requires a viable revenue mechanism to support these investments, especially to promote UPI in Tier 3-6 cities”. While noting that the incentive support provided by govt “constitutes only 11% of the cost incurred by the industry,” the committee said “establishing a viable revenue mechanism is critical to ensuring the UPI ecosystem achieves financial sustainability without perpetually straining the government exchequer”.
According to the report, in the “absence of merchant discount rate, adequate budgetary support by govt is essential to ensure that there is no further strain on the UPI payment ecosystem”.On banking, the committee highlighted what it called a “critical structural deficit in formal lending” and recommended a policy shift in the Pradhan Mantri Jan Dhan Yojana. It urged govt to “officially pivot its policy focus from mere account acquisition to active usage, increased digital literacy and sustained, outcome-based financial utilisation”. The panel said that to support the objective of Viksit Bharat 2047, bank-led credit growth had historically been the strategy followed in developed economies.
