On 2nd September 2019, the Steering Committee on Financial technology (Fintech) has submitted its report to the Finance Ministry. The committee was formed in March 2018 under the chairmanship of the Economic Affairs Secretary to consider various issues relating to the development of the fintech sector in India, and analyse it potential for enhancing the financial inclusion of micro, small and medium enterprises (MSMEs).
Background
In view of the growing importance of the Fintech and its potential to unleash the economic growth, government formed the Steering Committee which was constituted under the chairmanship of Atanu Chakraborty to make Fintech related regulations more flexible and generate enhanced entrepreneurship in an area where India has distinctive comparative strengths vis-a-vis other emerging economies.
Importance of Financial Technologies The growth of Fintech, or the designing and provisioning of financial services by using new technological innovations, is one of the most significant developments in the financial sector in recent past. Fintech has the potential to play a big role in increasing access to finance, and in promoting the growth of MSMEs in the country. However, the broader Fintech landscape all over the world comprises of a variety of day-to-day financial services enhanced by technology. Mobile payments, cryptocurrency, investment advisory, insurance aggregators, peer-to-peer lending and some more services which traditionally required human capital, now form the Fintech landscape. |
Recommendations of the Committee
The Committee submitted report on 2 September, 2019 and recommended the following:
Develop a Virtual Banking System:
Way Forward
The report has stressed on the need to improve inter-ministerial coordination in the field of fintech upgradation and adoption.