Related Topics: FinTech, Virtual Banking System
Steering Committee on Fintech constituted by the Ministry of Finance, Department of Economic Affairs has submitted its Final Report to Union Finance & Corporate Affairs Minister Nirmala Sitharaman.
About the Committee
- It was formed in March 2018 under the chairmanship of the Economic Affairs Secretary.
- The mandate of the committee is to consider various issues relating to the development of the fintech sector in India, and how fintech can be used to enhance the financial inclusion of micro, small and medium enterprises.
What’s in the Report?
- The report outlines the current landscape in the Fintech space globally and in India and studies the various issues relating to its development.
- The report makes recommendations focusing on how fintech can be leveraged to enhance financial inclusion of MSMEs with a view to making fintech related regulations more flexible and generate enhanced entrepreneurship.
- Department of Financial Services and the Reserve Bank of India may examine the suitability of ‘virtual banking system’ in the Indian context.
- Comprehensive legal framework for consumer protection should be put in place keeping in mind the rise of fintech and digital services.
- Eliminate discrimination in access to payment infrastructure to non-banks as compared to banks, with a view to enhance competition and innovation.
- Improve the debt financing in India by developing a marketplace model by reforming the current peer-to-peer (P2P) lending platforms.
- Insurance companies and lending agencies should be encouraged to use drone and remote sensing technology for crop area, damage and location assessments to support risk reduction in insurance/lending business.
- Department of Financial Services(DFS) should work with PSU banks to bring in more efficiency to their work and reduce fraud and security risks.
- NABARD should take immediate steps to create a credit registry for farmers with special thrust for fintech use along with core banking solutions (CBS) by agri-financial institutions, included cooperative societies.
- Fast adoption of regulation technology (or RegTech) by all financial-sector regulators. This will make ensuring compliance with existing regulations easier, quicker, and effective for everyone.
- Special drive for modernisation and standardisation of land records by setting up a dedicated National Digital Land Records Mission based on a common National Land Records Standards with the involvement of State Land and Registration departments, to make available land ownership data on an online basis to Financial Institutions.
What Is Fintech?
- Fintech, the word, is a combination of “financial technology”.
- It is used to describe new tech that seeks to improve and automate the delivery and use of financial services.
- At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones.
[Source: The Hindu, Investopedia]