Reserve Bank is setting up a multi-disciplinary panel to understand financial technology (fintech) companies and create the right ecosystem for them.
The committee will have representatives from other financial regulators and stakeholders from the industry. “RBI is in the process of setting up a multi-disciplinary committee with representatives from all financial regulators, stakeholders and banks to conduct an exploratory study of what kind of fintech is happening in the country, what can be allowed and create the right ecosystem for it,” RBI Executive Director N S Vishwanathan said at an industry event here.
He also pointed out that fintech covers a wide scope of areas including lending, insurance and transactions. “We have to see what we should encourage, what should not be encouraged and on what we should be ambivalent about.”
RBI is also looking at other technology-based systems, trends for sale of receivables and unified payment interface systems. Vishwanathan added that Fintech provides efficient opportunities and benefits in the way banking transactions can be done, apart from reducing the cost of transactions, ease of transactions and ultimately financial inclusion.
“It is, therefore, necessary to understand how this sector can be regulated and who will regulate the sector,” he said.
“There are some risks involved. What is clear is that it will result in financial dis-intermediation, and we have to see how the banking system should handle that,” he further said.
Vishwanathan explained there were 23 crore new accounts opened under the government’s Jan Dhan scheme and they could see “more traction through fintech platforms”.
Among the fintech entities, peer-to-peer (p2p) lending is gaining prominence, and RBI recently initiated steps to regulate this nascent business. It proposed registering P2P lending platforms as non-banking financial companies, he added.