Fintech is a part of our everyday life today. In just two decades the combination of “finance” and “technology” has changed the entire world. There were many innovations in the fintech sector, without which today’s generation cannot be imagined. RBI has also played an important role in the expansion of fintech through its decisions.
Fintech is a part of our everyday life today. In just two decades the combination of “finance” and “technology” has changed the entire world. There were many innovations in the fintech sector, without which today’s generation cannot be imagined. RBI has also played an important role in the expansion of fintech through its decisions. This year also RBI has taken many important steps for the fintech sector. Now that there are only a few days left for the year 2023 to end, let us take a look at the important changes in the fintech sector this year-
1. Digital Lending
Taking a big step this year, RBI approved the guidelines related to ‘First Loss Default Guarantee (FLDG)’. This is expected to promote digital lending in future. Reserve Bank Governor Shaktikanta Das had said after the Monetary Policy Committee meeting in June that after talking to all stakeholders and striking a balance between innovation and calculated risk, the default loss guarantee arrangement in digital lending will be approved. Has been given.
2. Cross-Border UPI Transactions
To enable Indian citizens to make UPI payments abroad, NPCI International Payments Limited (NPIL) has partnered with payment systems of many countries outside India. This includes Singapore, UAE, Mauritius, Nepal and Bhutan. With its help, Indians living in these countries can send money to India in real-time. At the same time, Indian students or other citizens living there, their parents or relatives sitting in India will be able to easily send money. Cross-border UPI payments are expected to significantly reduce the cost of transferring money abroad.
3. Central Bank Digital Currency
RBI has launched its own Central Bank Digital Currency (CBDC), named ‘e-Rupee’. However, it was first launched as a pilot project on 1 December 2022. With this, RBI has now joined the few central banks in the world which have digital currency. Distribution of e-Rupee will be done through banks. Common citizens will be able to keep it in their mobile phones and digital wallets. It can be transferred to another person or business only through digital wallet.
4. Cross-Border Transaction Guidelines for Fintech
The central bank issued a guideline in 2023 to regulate cross-border transactions of payment aggregators. Under this, cross border payment transactions related to import-export of goods and services will be regulated. RBI in its circular introduced a new category called Payment Aggregator-Cross Border (PA-CB) to include all entities involved in facilitating cross border payments. RBI has taken this step to maintain the stability and integrity of the country’s financial system.
5. Framework for regulation of fintech
These days RBI is busy in creating a fintech repository, which will be launched in April 2024. RBI Governor Shaktikanta Das said that we are encouraging fintechs to provide all the necessary information on their own in this repository. On November 23, RBI Deputy Governor M Rajeshwar Rao said there is a need to continuously work on redefining the rules and regulatory framework to promote innovation in the fintech industry.
