At the recently concluded Global Fintech Fest, Union Finance Minister Ms. Nirmala Sitaraman lauded India’s phenomenal success in the fintech space. Countries such as Singapore, Bhutan and France have even shown active interest in adopting India’s Unified Payment Interface (UPI)! V. Anantha Nageswaran, India’s Chief Economic Advisor, went on to mention that our total fintech market is expected to touch a trillion dollars by 2030, and this next next wave of growth could be driven by lending to MSMEs using account aggregator, UPI and the Open Credit Enablement Network (OCEN).

Yet another example of India’s expanding global footprint in fintech is the signing of a memorandum of understanding (MoU) between India’s International Financial Services Centers Authority (IFSCA) and the Monetary Authority of Singapore (MAS). The MoU allows both regulatory institutions to leverage sandboxes in their respective jurisdictions to support experiments in technology innovations. Further, the MoU also enables sharing of non-supervisory information and key developments in financial innovation in each other’s jurisdiction. One of the signatories aptly described this development as one that will serve as the ‘launch pad for Indian fintechs in Singapore and landing pad for Singapore fintechs to India.’

This year’s Global Fintech Fest was an eventful one. The National Payments Corporation of India launched three new initiatives:

• RuPay Credit Card on UPI
• UPI LITE
• Bharat BillPay Cross-Border Bill Payments

While each of these initiatives is independently focussed on solving unique issues in the Indian payment ecosystem, these are collectively designed to extend the reach of digital payments to many new users across India and abroad. Access to digital payments has always been among the first benchmarks of financial inclusion and the fintech industry is expected to build value-add services on the India stack to further extend this reach.

Account Aggregator or AA, is often quoted as an example of regulatory innovation. In 2018, RBI was the first regulator to release technical specifications for AA applications. Ever since, the AA framework has only grown from strength to strength. Driven by strong industry collective and a nudge by the Government of India, the AA framework has seen quick adoption among banks and other financial institutions.

AA stands apart on account of its capability to aggregate financial data from diverse service providers, and to build analytics and insights from this consolidated view. This information not only helps consumers in their financial planning, but also allows financial service providers to offer customised products to their customers. The AA framework also has an important element of ‘electronic consent architecture’ which improves upon the open banking regimes of many developed countries.

Just as UPI helped onboard Indian citizens to digital payment channels, Account Aggregator has the potential to transform digital credit by making it more seamless and accessible to all.

Rural finance is closely linked with economic development, especially in a country like India. In this context, we focussed on Kisan Credit Card (KCC) – a credit scheme introduced in 1998 by Indian public sector banks for our farmers. While there has been both demand and supply, there were many roadblocks in availing credit such as paper-intensive processes, high TAT, and additional costs for farmers.

RBIH, under the guidance of RBI, developed the pilot project for digitalising KCC lending to solve for all these problems and more

The project is currently being implemented in Madhya Pradesh and Tamil Nadu in partnership with Union Bank of India and Federal Bank respectively. On a successful implementation, we look forward to it being made the norm across the length and breadth of the country.

Rural finance is closely linked with economic development, especially in a country like India. In this context, we focussed on Kisan Credit Card (KCC) – a credit scheme introduced in 1998 by Indian public sector banks for our farmers. While there has been both demand and supply, there were many roadblocks in availing credit such as paper-intensive processes, high TAT, and additional costs for farmers.

RBIH, under the guidance of RBI, developed the pilot project for digitalising KCC lending to solve for all these problems and more

The project is currently being implemented in Madhya Pradesh and Tamil Nadu in partnership with Union Bank of India and Federal Bank respectively. On a successful implementation, we look forward to it being made the norm across the length and breadth of the country.

There has been phenomenal growth of financial technology in India. With high rates of digital adoption and heavy investments in innovative startups, India’s fintech space is leading the way for the world. In such a dynamic environment, there is a need for all stakeholders to stay updated with latest industry ongoings. To this end, RBIH will publish a quarterly Private Equity-Venture Capital (PE-VC) Report – the latest of which can be accessed here.

India’s push for digital infrastructure began in 2010, and there has been no looking back since. This has opened up opportunities for banks and financial institutions to make a shift from a one-size-fits-all approach to a more personalised outlook. But does this change seep down to every citizen across the length and breadth of our country? Rajesh Bansal and Somya Singh pen their thoughts on the subject in this article.