India’s central bank wants to put a leash on the booming fintech sector
The disruptive and revolutionary technologies that shook the foundations of India’s traditional financial sector may soon run into a central bank check post.
“Bringing fintech under the regulatory ambit should provide a level playing field and encourage financial innovations. In this context, the Reserve Bank (of India, RBI) is working on framing an appropriate response to the regulatory challenges posed by developments in fintech in India,” the central bank said in its Trend And Progress Of Banking In India report, released in December.
The RBI believes fintech growth in India involves several potential risks. These include micro-financials such as credit and liquidity risk, cyber and legal risks, and unsustainable credit growth, among others. So, last September, the banking regulator ended the unchecked run of peer-to-peer lending. And while it has issued cautionary statements against cryptocurrencies, there are no binding regulations yet.
Photo courtesy of Meena Kadri.