India’s fintech industry has welcome the move by the Reserve Bank of India to set up a repository for capturing information about fintech firms respectively.
In a move to enhance the security, integrity, and privacy of financial sector data and bring transparency about fintechs in the country, the central bank announced its plans to establish a cloud facility and set up a repository.
The Indian Financial Technology and Allied Services (IFTAS), a wholly-owned subsidiary of RBI, will set up and operate the cloud facility. The repository will be operationalised by the Reserve Bank Innovation Hub by April 2024, and necessary guidelines will be issued separately.
Industry executives stated that the cloud facility would ensure the security of customer data.
“A Fintech ‘Yellow pages’ can be a game changer for emerging fintechs to put themselves out there and increase their discoverability & visibility within the ecosystem and with the regulator. Such a repository will also help in designing policy approaches that will help a larger cross section of the ecosystem and impact more customers positively,” said Yashwant Lodha, Co-founder, PayNearby.
Similarly, fintech companies expect smoother operations with the establishment of the cloud facility and will act as a source of transparent information about fintech firms in India.
“While this increases regulatory compliance requirements, it also ensures that fintechs are favourably positioned in the eyes of regulators due to their innovative products and commitment to financial inclusion. This initiative holds the potential to unlock unprecedented growth and innovation within the fintech ecosystem by fostering collaboration, transparency, and informed policymaking,” said Joginder Rana, VC and MD of CASHe.
Meanwhile, the central bank also said it would set up a repository for recording information about fintech companies by April next year.
This fintech repository will record information about a fintech’s activities, products, technology stack, financial information, among others which will help design policy approaches, the central bank said. It will be voluntary for fintechs to provide information to the repository.
The central bank said it aims at understanding the developments in the ecosystem which includes fintechs utilising technologies like Distributed Ledger Technology (DLT), Artificial Intelligence / Machine Learning (AI/ML).
Fintech players explained a repository will help the regulator with real-time insights adopt an agile decision-making process.
“RBI’s proposal to create a fintech repository is a very positive move for the industry, as it will further catalyse innovation by fostering transparency and improved collaboration among fintechs, other financial services industry players, and regulators. The approach to encouraging voluntary contributions from fintechs will empower regulators with real-time insights and enable informed, agile, and risk-mitigating decision-making,” Anand Agrawal, co-founder and CPTO, Credgenics.