The Reserve Bank of India (RBI) Governor Shaktikanta Das on Tuesday said that the central bank is committed to supporting innovation for fintech companies while keeping in mind consumer protection.
Das, who was delivering a speech at the Global Fintech Festival in Mumbai said, “Technology, innovation and fintech are working in tandem and contributing to the dynamism of this sector. In our journey towards higher levels of sustainable development and financial inclusion, these forces have morphed into force multipliers. We have leveraged a lot on these forces; we need to leverage even more.”
“We have created a new FinTech Department in the RBI from January 2022 to give focused attention to this evolving and dynamic sector. Further, the RBI is now actively working towards a phased implementation of Central Bank Digital Currency (CBDC) in both wholesale and retail segments. This is expected to give further fillip to the digital ecosystem,” the governor said, while adding, that there has been exponential growth of technological enablers in India.
“The total number of broadband internet users in India stood at 80.7 crore at the end of July 20221. With more than 46.5 crore Jan Dhan accounts, 134 crore Aadhaar enrolments and 120 crore mobile connections, new opportunities are opening up for implementing innovative ways of integrating and delivering services. This can be gauged from the emergence of 100 unicorns in the country with record 44 unicorns established last year,” the governor said.
During his speech Das said, “The period from March 2020 to August 2022 has seen a massive growth of 427 per cent in UPI transactions, which reached a new high of 657 crore transactions in August 20225 alone. The number of UPI QR code enabled payment acceptance points6 increased by about 9 crore (86 per cent YoY) to reach 20 crore as at end of July 2022, reflecting the growing acceptance and preference for contactless payments.”
India’s financial services industry has seen enormous transformation. Products like internet and mobile banking, electronic funds transfer, UPI, Aadhaar e-KYC, Bharat Bill Payment System (BBPS), QR Scan & Pay, digital pre-paid instruments and similar other initiatives have transformed the traditional banking operations, Das pointed out.
“We now have digital-mobile-anywhere any time banking. While several initiatives originated from the industry, the government and the regulators have created an enabling ecosystem to promote the FinTech sector. Initiatives like Startup India, Digital India, India Stack, Account Aggregators, Peer to Peer lending platforms and 24×7 digital payment systems have proved to be key enablers. The Fintech ecosystem in India has indeed evolved and is poised for a giant leap,” he noted.
The recently launched UPI123Pay was aimed at enhancing digital financial inclusion by enabling over 40 crore feature phone users to access the benefits of UPI in a safe and secure manner, Das said in his address.
While the central bank continues to support technological advancement, it will also ensure enhanced customer protection, cyber security, resilience and manage financial stability, Das said. It is equally important that adequate attention is placed on governance and conduct issues in fintechs, he added.