Fintech sector needs regulatory framework to secure interests of consumers: Shaktikanta Das
Shaktikanta Das said that India stands at the second place in the world in accepting Fintech, as this sector has created lots of job opportunity, adding that in the past five years e-payments has witnessed a nine-fold growth.
RBI Governor Shaktikanta Das said that financial technology (Fintech) sector needs a regulatory framework to secure the interests of consumers, while inaugurating the Fintech Conclave 2019, organised by Niti Aayog, in New Delhi today. Observing that FinTech has the potential to reshape the financial services and financial inclusion landscape in India in fundamental ways, RBI Governor said, it can reduce costs and improve access and quality of financial services.
Das said that India stands at the second place in the world in accepting Fintech, as this sector has created lots of job opportunity, adding that in the past five years e-payments has witnessed a nine-fold growth.
Talking about payment banks, he said the RBI has given nod to it while adding that as many as 7 of these have commenced their operations.
The RBI governor also said that guidelines on regulatory sandbox will be issued in the next two months to promote FinTech in the country. A sandbox approach means experimenting and learning before finally adopting a technology or system. This approach would help in containing the impact of failures.
Pointing out some of the challenges, Das said risks for FinTech products may also arise from cross border legal and regulatory issues, adding that data confidentiality and customer protection are major areas that also need to be addressed.
Addressing the conclave, Economic Affairs Secretary Subhas Chandra Garg said e-payments are giving a tough competition to cash-based transaction. Smartphones and digital identity are helping digital transactions, he added.
Garg also said that financial data should not be treated as sensitive data, and the country would miss out on the fintech revolution if data protection laws are not aligned.
Further, he said that India is now the world`s second-biggest fintech hub, trailing only the US, with 2,035 startups operating in the sector, citing the India Fintech Report 2019.
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Notably, the fintech sector comprises mobile payments, money transfers, loans, crowdfunding, asset management, among many others. Mumbai and Bengaluru are the leading startup hubs in the country.