Global Fintech Festival 2022: RBI Governor highlights AA’s role in availment of Credit to all
Speaking at the Global Fintech Festival, held in Mumbai September 20, 2022, Shri Shaktikanta Das, Governor, Reserve Bank of India hailed AA as an important step for customers to gain control over their financial data. The Governor, who spoke about Fintech as a Force Multiplier, discussed the innovation in the financial sector that has transformed traditional banking to digital-mobile -anywhere-anytime banking.
Insightful excerpts from his speech are given below:
Innovation in our Financial Sector
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 (P2P) 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.
Along with its subsidiary, Reserve Bank Innovation Hub (RBIH), RBI has been working on one of the key challenges currently associated with availment of credit, that is – a largely paper based process with high Turn Around Time (TAT). Sometimes it requires multiple visits to bank branches and cumbersome documentation. It entails high operational costs for lenders and opportunity cost for borrowers.
A framework as an example of tech-enabled regulatory innovation by the RBI
This is an important step towards realising the potential of empowering millions of underserved customers to digitally access and share their financial data across institutions in a secure and efficient manner.
The framework has been expanded to include institutions regulated by SEBI, IRDAI and PFRDA.
This is a progressive step to help customers gain control over their financial data and use it for accessing a variety of products including credit, insurance, and investments for their own benefit. Centralised KYC (CKYC) and Video KYC are other enablers to facilitate seamless onboarding of customers in a digital and cost effective manner. We are giving greater focus on these initiatives.
Governance and Conduct
At the end of the day, sustainability of any FinTech activity or business is about enhanced customer protection, better cyber security and resilience, managing financial integrity and strong data protection. The fintech road ahead will witness ever growing traffic in addition to the large number of existing players who are already there. It is, therefore, imperative that every player on this road follows the traffic rules for his/her own safety and the safety of others.
You can read the full speech here.