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Regulatory Framework needed for promoting digital banks
July 22, 2022
Government think-tank Niti Aayog on Wednesday said India has a technology stack to facilitate digital banks and there is need for creating a regulatory framework for promoting this.
The Aayog, in its report titled ‘Digital Banks: A Proposal for Licensing & Regulatory Regime for India’, makes a case and offers a template and roadmap for a digital bank licensing and regulatory regime for the country.
India’s public digital infrastructure, especially Unified Payments Interface (UPI) has successfully demonstrated how to challenge established incumbents, it said, adding that UPI transactions measured have surpassed Rs 4 trillion in value.
“Aadhaar authentications have passed 55 trillion. Finally, India is at the cusp of operationalizing its own open banking framework. These indices demonstrate India has the technology stack to fully facilitate DBs,” the report said.
“Creating a blueprint for digital banking regulatory framework and policy offers India the opportunity to cement her position as the global leader in Fintech at the same time as solving the several public policy challenges she faces,” it added.
The report suggested the introduction of a restricted Digital Business bank licence and a restricted Digital Consumer Bank licence.
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