Fintech
Economic Survey Calls for Regulatory Gaps in Fintech Sector | Budget 2024 News
The industry is moving toward data-driven lending instead of ‘judgment-based lending,’ he says.
For the first time, UPI transactions crossed 100 billion and closed at 131 billion in FY24, compared to FY23. (Photo: Shutterstock)Ajinkya Kawale Mumbai
There is a need to continuously identify regulatory gaps in the fintech sector and benchmark regulations against global best practices, the Economic Survey 2024 said on Monday.
This observation comes at a time when the country is embracing emerging technologies such as artificial intelligence and machine learning (AI/ML), decentralized finance, and the Internet of Things (IoT).
Click here to contact us on WhatsApp
The Indian fintech sector is evolving and there is a high rate of adoption of new technologies in financial services supported by digital public infrastructures (DPIs).
DPI, also known as India Stack, comprises the core components of the digital identification and payment infrastructure, such as Aadhaar, digital payments through Unified Payments Interface (UPI), and the account aggregation framework.
“These IPRs can be used on a shared basis by multiple actors to ensure optimal outcomes. Their use has brought transparency, scaled operations and timely provision of financial services to the public,” the survey said.
Public and private financial sector firms need to become customer-centric. “A common user data approach, such as Know Your Customer (KYC) among regulators, should be developed. In the medium term, efforts should be made to move towards data-driven lending instead of judgment-driven lending, especially for small businesses,” the survey said.
Calls for India to become a fintech nation and lead innovation in the financial services sector come in the wake of increased adoption of payment services such as UPI operated by the National Payments Corporation of India (NPCI).
For the first time, UPI transactions crossed 100 billion and closed at 131 billion in FY24.