The Unified Payments Interface is already providing many functionalities that a central bank digital currency (CBDC) is expected to offer, according to Chief Economic Advisor Dr V Anantha Nageswaran.
“UPI model, as the fast retail payment system, is already mimicking a few features of central bank digital currency, so we are sort of leapfrogging the technology even as other countries are dabbling with the design of CBDCs,” Nageswaran said at the Global Fintech Fest today.
Disruptive in a positive way
Account aggregation in combination with developing facilities such as a common-KYC is enabling seamless transfer of information across financial institutions and opening unprecedented doors for finance.
“So, account aggregator is as important and as disruptive—in a positive way—as Jan Dhan Yojana was 5 years ago,” Nageswaran said, adding that as account aggregation grows, India will see more financial inclusion and increased access to finance.
India’s fintech market is one of the fastest growing in the world and is expected to grow 30-32 times over the next 7.5-8 years to $1 trillion by 2030 from $31 billion currently. Also the third largest fintech ecosystem, India’s fintech adoption rate is 87%—much higher than the global average of 64% with the ecosystem expected to increase at 30% CAGR.
“India is at the cusp of an inflection point and payout season is beginning. Account aggregators is one such payoff for the digital infrastructure we are creating,” Nageswaran said.
MSME lending
He added that the next wave of financial technology will be led by cash flow-based lending to MSMEs using tools using account aggregation, UPI and OCEN (Open Credit Enablement Network).
India has a lending potential of ₹3 trillion to MSMEs in FY23 itself, and this will be led by GST invoicing and bank statements made available on account aggregator platforms and banks adopting OCEN.
The biggest hurdle for MSMEs’ growth is still access to finance, not just in terms of loans but also working capital. Fintech innovation is today enabling financial innovation for non-collateral based lending through receivables and bill discounting. It is also incentivising large enterprises to pay their bills on time, he said.

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