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Informist, Thursday, Aug 29, 2024

--RBI Sankar: Fintechs will continue to transform financial ecosystem 

--RBI Sankar: PSU cos lags private peers in technology adoption 

--RBI Sankar: Scope to grow digital transactions by around 75% 

--RBI Sankar: Fintech regulatory body must remove system inefficiency

--RBI Sankar: Fintechs need to move away from dark patterns 

--RBI Sankar: Fintechs should not subsume to business interest 

--RBI Sankar: Regulatory perimeter has to adjust to evolving tech 

--RBI Sankar: To have more fintech self-regulatory bodies in future 

--RBI Sankar: Fintech regulatory body must gain trust of customers

--RBI Sankar: RBI, fintech self-regulator must ally to cut cyber-risk 

--RBI Sankar launches user programmability in e-rupee 

--RBI Sankar launches UPI ATM that offers deposit-withdrawal services 

MUMBAI – The proposed self-regulatory body for financial technology companies must aim to remove inefficiencies in the existing system with the use of technology, Reserve Bank of India Deputy Governor T. Rabi Sankar said today. "One of the key issues being discussed globally is about how to achieve the efficiency we have seen in domestic payment systems. How to achieve the same efficiency in cross-border systems? And it is fairly clear from the global discussions that are taking place, that the solution has to evolve eventually," Sankar said.

In order to achieve an efficient system, there is a need for participants other than banks, need for technologies other than those that exist today, and the need to have processes that are different from the existing corresponding banking systems that exist, he said.

On Wednesday, RBI gave its approval to Fintech Association for Consumer Empowerment as a self-regulatory body for the financial technology sector. Sankar said that they plan to have more such regulatory bodies for the financial technology space going forward.

He said the main aim of the self-regulatory body is to maintain a two-way communication between the Reserve Bank of India and the financial technology industry. He also said that financial technology companies will continue to transform the financial ecosystem and regulations must change and evolve as newer technologies are developed in the space.

Sankar said the regulatory body needs to ensure that financial technology companies gain the trust of its customers, which is a major challenge for them.

"Financial sectors like banks and mutual funds get the trust of users from the fact that they are licensed, they are regulated. Now the FinTech sector, for the large part, are not licensed by a regulator, not regulated. This makes it all the more challenging for them, to demonstrate, that they behave responsibly, and invoke public trust." Self-regulatory bodies must also curb questionable practices in the financial technology space, Sankar said.

In the spread of technology, Sankar said that public sector companies are less effective compared to their private peers. "While the digital public infrastructure will continue to be created, private sector will continue to play a more and more important role." In terms of transactions on the Unified Payments Interface, Sankar said that there is scope for these transactions to rise by 75%.

Sankar also launched the NPCI's user programmability in e-rupee product and the UPI ATM that offers cash deposit-withdrawal services.  End 

Reported by Kshipra Petkar

Edited by Ashish Shirke

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