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Informist, Thursday, Mar. 20, 2025

 

NEW DELHI – The Parliamentary Standing Committee on Finance has recommended the government to address infrastructure gaps, financial literacy and cybersecurity concerns to deepen the adoption of digital payments in rural areas. It recommended to intensify financial literacy programmes to build trust in rural areas and also advocated for the use of artificial intelligence for cyber fraud detection.

 

"The Committee recommend that additional steps such as intensifying financial literacy programmes by leveraging local influencers and self-help-groups to build trust and familiarity with digital transactions are needed to deepen penetration in underserved regions along with enhancing cybersecurity measures to boost user confidence," the committee said.

 

"...Use of Artificial Intelligence for fraud detection and automatic real time settlement and pattern recognition may be explored...Dedicated helpline for users, especially in the rural areas with vernacular language support can further aid fraud prevention and redressal and help the users gain confidence in using the digital payment systems," the committee said.

 

The committee chaired by Bharatiya Janata Party leader Bhartruhari Mahtab tabled its report in Lok Sabha on Wednesday.

 

Apart from digital payments, the finance panel also flagged its concern over increase in foreign direct investment limit in insurance sector from 74% to 100%, announced in the Budget for 2025-26 (Apr-Mar). The committee suggested the government to put safeguard measures to counter concern such as profit repatriation where foreign investors may send their earnings back to home countries rather than reinvesting in India. It also highlighted job security concern stating that increased foreign control may lead to cost cutting measures.

 

Another critical issue, the committee flagged was focus on high-margin policies. It opined that the foreign players may prioritise profitability by neglecting rural and financially weaker sections.

 

The panel urged the government that the downside of the increased FDI in insurance sector be dealt with adequately and scrupulously.

 

The committee noted that the increase in FDI may aid in adoption of best global practices and help improve insurance penetration and density in the country. The parliamentary panel observed that the integration of InsurTech, or insurance technology, has the potential to enhance efficiency and customer experience and risk assessment through digital innovation as advanced digital technologies.  End

 

 

Reported by Kuldeep Singh

Edited by Akul Nishant Akhoury

 

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