Digital Payments Boom: UPI Jumps 114% CAGR to 18,587 Crore in FY25

byPaytm Editorial TeamLast Updated: September 16, 2025
Key Takeaways: 
  • Digital payments surge – Transactions rose from 2,071 crore (2017–18) to 22,831 crore (2024–25); value from ₹1,962 lakh crore to ₹3,509 lakh crore.
  • UPI dominates – From 92 crore to 18,587 crore transactions; value jumped from ₹1.10 lakh crore to ₹261 lakh crore in 8 years.
  • Banking safeguards – Early warning systems, IBC, and CRILC to spot and fix stressed loans.
  • MSME boost – Schemes like ECLGS and CGTMSE expanding credit access.
  • PSB reforms – Better governance, tech adoption, and amalgamations for efficiency.

Source: PIB
The Government of India, along with the Reserve Bank of India (RBI), has rolled out a series of comprehensive reforms to improve credit discipline, ensure responsible lending, strengthen governance in public sector banks (PSBs), boost MSME financing, and expand the country’s digital payments ecosystem.

The measures, announced in a written reply by Minister of State for Finance Shri Pankaj Chaudhary in the Lok Sabha, focus on early detection of stressed assets, technology adoption, and improved regulatory oversight.

Digital Payments Growth

India’s digital transactions have grown dramatically:

  • Total volume – from 2,071 crore in FY 2017–18 to 22,831 crore in FY 2024–25 (CAGR: 41%).
  • Total value – from ₹1,962 lakh crore to ₹3,509 lakh crore in the same period.
  • Monthly volume – from 1,739 crore (Jun 2024) to 2,099 crore (Jun 2025).
  • Monthly value – from ₹244 lakh crore to ₹264 lakh crore in the same period.

UPI Highlights:

  • Transactions rose from 92 crore in FY 2017–18 to 18,587 crore in FY 2024–25 (CAGR: 114%).
  • Value increased from ₹1.10 lakh crore to ₹261 lakh crore.
  • July 2025 saw a record 1,946.79 crore UPI transactions in a single month.

Strengthening Credit Discipline in PSBs

To protect the financial system from bad loans and wilful defaults, multiple steps have been implemented:

  • Insolvency and Bankruptcy Code (IBC) enacted to resolve defaults in a time-bound manner.
  • Central Repository of Information on Large Credits (CRILC) set up by RBI to monitor corporate loans and track high-value accounts for potential fraud or wilful default.

Early Recognition and Resolution of Stressed Assets

To safeguard financial institutions from large borrower defaults or delays:

  • Framework for early recognition and time-bound resolution of stressed loans.
  • Automated Early Warning Systems using third-party data to prevent loan accounts from slipping into NPAs*.
  • Market-based mechanisms to transfer stressed assets to eligible buyers, reducing banks’ credit risk.
  • Establishment of National Asset Reconstruction Company Limited (NARCL) to consolidate stressed debt from various lenders and manage its sale for better recovery.

*NPA: NPAs (Non-Performing Assets) are loans where repayment of interest or principal has been overdue for more than 90 days.

Governance and Efficiency Reforms in PSBs

  • Arms-length selection of top management via the Financial Services Institutions Bureau.
  • Appointment of Non-Executive Chairmen in nationalised banks.
  • Performance-based extensions for Managing Directors and wider talent pool recruitment.
  • EASE Reforms (Enhanced Access & Service Excellence) promoting governance, data-driven lending, risk management, and HR improvements.
  • Amalgamation of PSBs to increase scale, financial capacity, and operational efficiency.

Technology Adoption and Financial Inclusion

Legislative Measures for Banking Oversight

  • Banking Regulation (Amendment) Act, 2020 – strengthened governance, stability, and oversight of co-operative banks.
  • Banking Laws (Amendment) Act, 2025 – improved depositor protection, audit quality in PSBs, shifted statutory reporting to RBI, and simplified customer nomination processes.

Boosting MSME Credit Flow

The Government has launched several initiatives to ease credit access for Micro, Small, and Medium Enterprises:

Author

Paytm Editorial Team

The Paytm Editorial Team is a collaborative group of writers, editors, and industry experts. We're dedicated to bringing you the latest insights, news, and guides on digital payments, financial services, and the technology that's shaping India's economy. We offer easy-to-follow guides and insights to help you explore Paytm’s products, features, and services. Our goal is to provide clear, reliable, and helpful information to empower you on your financial journey.

FAQs

What are the key highlights of India’s recent banking reforms?

The reforms focus on early detection of stressed loans, strict credit discipline in public sector banks, improved governance, support for MSME financing, and expansion of digital payment systems like UPI.

How has India’s digital payments ecosystem grown in recent years?

Digital transactions grew from 2,071 crore in FY 2017–18 to 22,831 crore in FY 2024–25, with UPI transactions alone rising from 92 crore to 18,587 crore in the same period.

What measures are being taken to prevent NPAs in banks?

Banks are using early recognition frameworks, automated early warning systems, and market-based mechanisms to identify and resolve stressed loans before they become NPAs.

What support is available for MSMEs under these reforms?

The government offers schemes like the Mutual Credit Guarantee Scheme, Emergency Credit Line Guarantee Scheme, a new digital credit assessment model, and enhanced guarantees under CGTMSE to improve MSME credit access.

What is the National Asset Reconstruction Company Limited (NARCL)?

NARCL is a government-backed entity that takes over stressed loans from multiple lenders, consolidates them, and manages their sale to recover value efficiently
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