We Are Here To Support Innovation, RBI Governor To Fintechs

Shaktikanta Das also said that the need of the hour is to ensure assurance of safety after following a process of green-lighting and due diligence by the regulated entities

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The Reserve Bank of India (RBI) governor Shaktikanta Das has said that the central bank's focus is on encouraging innovation and providing an enabling environment, which it makes a clear distinction between regulated and unregulated entities.

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"I assure fintechs that we are here to support innovation. RBI will come two steps ahead if you come one step ahead with innovation. While innovations are very much welcome, they should be responsible and benefit consumers. Fair practices, and robust governance will go a long way in sustaining fintechs' business models," said Das.

"I would also like to flag certain material concerns regarding the unbridled mushrooming of digital lending apps. The need of the hour is to ensure assurance of safety after following a process of green-lighting and due diligence by the regulated entities," added Das, while addressing the Global Fintech Fest.

The governor also added that, "Innovators have to work on ways to minimize cost and ensure that services and products are self-sustaining. If you depend on subsidy perennially or for a very long time, I think it is not a good thing. The Bengaluru-based RBI Innovation Hub had worked on digitalization of kisan credit card (KCC) loans, which would result in cost savings for the bank and the borrower and would make the process more efficient. A pilot project has been launched in Madhya Pradesh with Union Bank and Federal Bank providing digital KCC loans. This would be extended to rest of the country, but the pace would depend on the level of digitalization of farm land records."

Das was responding to a question on whether government is able to provide some subsidy for UPI123, a voice-based payment solution which had higher costs.