The study analyses the effect of virtual payment systems on banking system in India. This is about fast changing nature of digital transactions like UPI, internet banking, QR codes payments, debit cards and mobile wallets. The paper assesses the impact of digital payment systems on operational efficiency, customer convenience, financial inclusion, transparency and accessibility in banking. The nature of study is descriptive and analytical. It uses secondary data from RBI reports, NPCI statistical reports, government reports, banking journals, and financial studies over the period from 2019 to 2025. The results obtained is that digital payment systems have increased the speed of transactions, dependence on cash payments and enhanced banking services in both urban and rural areas. UPI is the most used digital payment platform owing to its instant transaction facility and user friendly nature. Though the main challenges that still persists in digital banking are cyber security issues, internet connectivity problems and lack of digital awareness. The conclusion that can be drawn from this study is that virtual payment systems is playing a significant role in revolutionising the Indian banking sector and further development in this sector will be largely dependent on technology development, safe and secured digital infra-structure and consumer awareness for secure practices online.
PRIYA RANJAN (Mon,) studied this question.