The Reserve Bank of India has said today that digitalisation can create a more complex and interconnected financial system with implications for financial stability. The Apex bank has released a Report on Currency and Finance for 2023-24, today. In this report, the central bank also said that digitalisation-induced changes in the behaviour of consumers and financial intermediaries can have implications for monetary policy.

It added that while improving the accessibility and convenience of financial services for customers, digitalisation raises concerns related to impulsive spending, herd behaviour and data security.

The report also said that digitalisation can impact inflation and output dynamics, and monetary policy transmission in diverse manners and the overall impact could vary over time given the fast pace of developments. The report, however, said that the digital age provides immense opportunities for India to accelerate its transition from an emerging market economy to an advanced economy.