RBI’s Tech Plans

Insights from Zarin Daruwala, Saif Khan, Yashwant Lodha, Joginder Rana, Mandar Agashe; Interesting views of some of the leading BFSI experts and stakeholders on changing Regulatory Framework on tech issues

Zarin Daruwala

Mandar Agashe

FinTech BizNews Service

Mumbai, December 8, 2023: Reserve Bank of India announced its monetary policy on Friday. Here is what some of the leading BFSI experts as well as stakeholders have to say about measures taken by the regulator.

RBI move aligns well with RBI’s 24x7 payments framework

Zarin Daruwala, Cluster CEO, India and South Asia markets (Bangladesh, Nepal and Sri Lanka), Standard Chartered Bank, says, RBI’s decision to hold the repo rate at 6.5% reflects confidence in the economic growth and a continued focus on managing the upside inflation risk. Updated macro forecasts bode well for the economy with inflation forecast to soften to 4% by Q2 2024-25 and growth likely to head higher to 7%. Allowing reversal of liquidity adjustment facility (LAF) on holidays and weekends will enable banks to better manage customer flows and this move also aligns well with RBI’s 24x7 payments framework. Enhancement of UPI transaction limits and e-Mandate limits will further encourage use of digital payment channels.

Responsible Digital Lending Is The Way To Go For Deepening Credit Penetration

Saif Khan, Chief Growth Officer, PayNearby, explains, while talking about Regulatory Framework for Web-Aggregation Of Loan Products: With this policy statement also, the RBI has reiterated that responsible Digital Lending is the way to go for deepening credit penetration in India. The introduction of a regulatory framework for WALPs is a progressive step and consistent with RBI's approach of ensuring customer safety and centricity while managing financial systemic risks through appropriate regulation.

Clear Enabler For Moving Some Higher Ticket Transactions To Digital Mode

Yashwant Lodha, Co-founder, PayNearby, talks about e-Mandates for recurring online transactions, Enhancement of limit for specified categories and Setting up of Fintech Repository: Increasing limits for UPI and emandates for specific merchant categories like Education, health, Financial instruments is a clear enabler for moving some higher ticket transactions also to a straight through digital mode as opposed to today's multi-step process. This will reduce friction in these categories and also open up new customer segments for digital financial service providers who can now do these transactions at a lower cost.

A Fintech 'Yellow pages' can be a game changer for emerging fintechs to put themselves out there and increase their discoverability & visibility within the ecosystem and with the regulator. Such a repository will also help in designing policy approaches that will help a larger cross section of the ecosystem and impact more customers positively.

Significant Stride Towards Enhancing Transparency

Joginder Rana, VC and MD of CASHe, feels: The creation of a comprehensive fintech repository marks a significant stride towards enhancing transparency in the sector. Fintechs will regularly update various details, including activities, products, technology stacks, and financial information. This facilitates regulators and stakeholders in gaining a deeper understanding of developments in the FinTech ecosystem. While this increases regulatory compliance requirements, it also ensures that fintechs are favourably positioned in the eyes of regulators due to their innovative products and commitment to financial inclusion. This initiative holds the potential to unlock unprecedented growth and innovation within the fintech ecosystem by fostering collaboration, transparency, and informed policymaking.

Transaction Limit Would No Longer Be A Bottleneck

Mandar Agashe, Founder and MD, Sarvatra Technologies, explains: Due to the ease of payments offered by it, UPI is emerging as a preferred mode of payments for not only small-value transactions but also for large-value transactions. The decision to increase the transaction limit for payments to hospitals and educational institutions from Rs.1 lakh to Rs.5 lakhs is a timely one. This will enable the users who are comfortable with making payments through UPI to continue using the platform for high-value payments as well. The transaction limit would no longer be a bottleneck which refrains the user from using UPI, especially when it comes to payments which are urgent in nature.

Similarly, the move to exempt the requirement of AFA for transactions up to Rs.1 lakh for the following categories, viz., subscription to mutual funds, payment of insurance premium and payments of credit card bills, will further enhance convenience of payments for users. People have got used to setting e-mandates and streamlining their recurring payments up to Rs.15,000. Now, enabling large value e-mandates without AFA highlights the user centricity, which will further enhance its adoptability.

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