“There is a need for ongoing review to identify regulatory gaps or overlaps and compare them to global best practices,” the survey notes. “In the medium term, efforts should be made to move towards data-driven lending rather than judgment-based lending, particularly for small businesses. »
The survey also indicates that an approach should be developed for common user data, such as Know Your Client (KYC) details between regulators.
The Reserve Bank of India is working on developing a framework to manage the country’s fintech ecosystem through its Utkarsh 2.0 project. The regulator has established a working group to review the rules governing fintech.
The survey also indicates that India is striving towards its goal of becoming a ‘fintech nation’.
“The vision is for India to evolve as a ‘fintech nation’ with the largest number of fintech companies and the highest rate of fintech adoption by incumbents, powered by digital public infrastructure,” says a economic study. India is one of the fastest growing fintech markets in the world. the world, hailed as the third growing fintech economy. In its recently released Financial Stability Report, the RBI sounded the alarm over high default levels among fintech lenders.
“NBFC-Fintech lenders have the highest share of sanctioned and outstanding amounts, also have the second highest delinquency levels, only below that of small finance banks,” the RBI had said while talking about lower personal loans at Rs 50,000.
Meanwhile, the survey also highlighted that the next big step in the coming years is likely to be artificial intelligence and machine learning (AI/ML), decentralized finance and the Internet of Things (IoT), among others .
“These have huge potential to disrupt the digital payments ecosystem,” he said.
The economic survey also suggests that companies in the financial sector – public or private – need to become customer-centric. Without it, most quantitative measures will remain elusive.
With an aim to make India a fintech nation, the government has launched many flagship projects such as Digital India Mission and Make-in-India.
Greater emphasis has been placed on creating digital payment infrastructure (DPI) such as Aadhaar, e-KYC, Aadhaar-enabled Payment System, UPI, Bharat QR, DigiLocker, e-sign, Account Aggregator, Open Network for Digital Commerce, among others. others.