How RBI is contributing to the rapid growth of FinTech in India

By Puja Sharma

The Reserve Bank of India (RBI) has set up an interior fintech office to zero in on the progressively changing monetary scene in the country.

According to a new inner RBI round, the FinTech office was made on January 4, 2022. The new office, subsuming the FinTech Division of Department of Payment and Settlement Systems, Central Office (DPSS, CO). The office won’t just advance development in the area, yet in addition, recognize the difficulties and potentially open doors related to it and address them on time, the roundabout expressed. It will likewise give a “structure for additional examination regarding the matter that can help strategy mediations by the Bank.”

“The recent announcement by RBI to set up a Fintech department is a timely intervention by the regulator to proactively assess and monitor the development, deployment, and audit of FinTech operations in the financial sector as it will help in further bolstering digital operations in India. I am confident that the FinTech department will create immense opportunities for the existing and new fintech players across verticals to serve millions of Indians through customized digital solutions and timely delivery of credit, thereby driving financial inclusion for the unbanked and underbanked,” Lalit Mehta, Co-founder & CEO, Decimal Technologies.

The move by RBI will also help in addressing the challenge of digital literacy across the remotest parts of the country and usher in continued transparency and proactive engagement with the industry players – start-ups and incumbents alike.

“Technology is a core function for fintech players and the Fintech department will help to promote the culture of innovation which is the cornerstone of any technological revolution and also to help us identify the challenges and the areas of improvement to help make the life of the end customer easier and in providing them access to financial services. The department will also provide a mechanism for inter coordination among the sectors to ensure that the sectors work in smooth coordination with each other,” he added.

As per the Central Bank, all matters connected with the assistance of valuable developments and brooding periods in the FinTech area, which might have more extensive ramifications for the monetary area and falling under the domain of the Bank, will be managed by the FinTech office.

Anand Kumar Bajaj, Founder, MD & CEO at PayNearby, a leading FinTech company and the largest branchless banking network in India, said: “The Reserve Bank of India (RBI) has always nurtured innovation and created frameworks to support technological adoption in the financial community. After the Committee on Deepening of Digital Payments (CDDP), Reserve Bank Innovation Hub (RBIH), and Regulatory Sandbox (RS), the setting up of a ‘fintech department’ is yet another encouraging step in this direction.”

India is all set to become Asia’s top fintech hub with an 87% adoption rate compared to the global average of 64%. We are on the cusp of a digital revolution and are thankful to have a regulator who is far-sighted and proactive. “The fintech department by RBI, will not only focus and facilitate innovation in the sector but will also recognize the challenges and opportunities associated with it and address them promptly. The department comes at an opportune time to guide us better and provide a solid foundation for fintech companies to fall back on. This initiative will be key in empowering the fintech sector while propelling the growth of the Indian economy,” Bajaj added.

CASHe, a digital lending FinTech company that provides fast, flexible, unsecured personal loans through a mobile application to young salaried millennials across India. The digital lending platform, providing credit to those that didn’t qualify for credit from conventional lending agencies and those that were new to credit.

“As the fintech landscape is maturing, the industry is witnessing rapid growth in financial entities and technology firms experimenting with a host of financial and technological solutions in a bid to address untapped segments and expand to newer markets. Therefore, setting up a separate FinTech department within RBI will aid in accelerating innovation and experimentation while driving transparency and the overall progress of the sector,” Joginder Rana, Vice-Chairman & MD at CASHe said.

The managing director of the end-to-end solutions provider focused on making financial transactions easy for Commercial Banks in Private and Public Sector, Co-operative Banks, Rural Regional Banks, and Credit Societies said,

 “We applaud the RBI’s foresight in creating a FinTech division within its ambit. Thanks to digital banking, underserved populations now have improved access to banking services at the touch of a fingertip. Technology has been a significant facilitator in the rise of the digital economy, allowing it to reach out to far-flung locations. The RBI’s progressive move will aid in fostering innovation and accelerate the digitization of technology and the adoption of new delivery channels and product offerings across levels,” Mandar Agashe, Vice-Chairman & MD at Sarvatra Technologies.

“This move by RBI will go a long way in strengthening the country’s fintech infrastructure to encourage the introduction of path-breaking services similar to Immediate Payments Service (IMPS), Unified Payments Interface (UPI). This will eventually improve and automate the delivery and usage of financial services across the ecosystem,” he added.