“Fintechs have not yet created enough of a track record that enables an evaluation of how trustworthy an entity is. This is something that is built over time. And in this, the SRO of the industry or SROs will have to play a leading role,” Reserve Bank of India Deputy Governor T Rabi Sankar said. The RBI on Wednesday granted an SRO license to the Fintech Association for Consumer Empowerment (FACE), an industry body for fintechs led by Sugandh Saxena.
The DG said the SRO must work consistently to create conditions that are conducive to competition. An important indicator of market integrity is price efficiency and one of the two major assets of the Fintech industry is lower cost and faster delivery. However, this cost efficiency should be driven by technology, not by an ability to withstand losses.
“Another priority for SROs should be to avoid questionable practices. SROs can also play a role similarly in removing inefficiencies in existing financial markets through the use of technology,” the DG said.
Providing value for customers, giving the regulator prudent feedback on industry practices, along with sensitising the industry about dark practices are also the duties of the SRO. Pre-sales communications, for example, advertising by such players, need to be truthful and not misleading. The SRO would be the first line of defence against such unethical practices, Sankar said.
Further, after initially setting a target for 1 million central bank digital currency (CBDC) transactions per day by late 2023, Sankar today said the RBI has not set any target in terms of the adoption of CBDCs.
“We want CBDC to grow in a manner that we are comfortable with and we have not set any target in terms of adoption or number of transactions for CBDC,” he said.
Separately, the DG today also announced the launch of UPI Interoperable Cash Deposit (UPI-ICD), which allows customers to deposit cash at ATMs operated by banks and white-label ATM operators (WLAOs) using UPI, either to their own bank account or any other bank account without the need for a physical card.
Consumers will be able to access these features as the banks gradually roll them out. ATM machines with open architecture can host bank apps positioning them as digital banking units offering cash deposits, withdrawals and other banking services such as opening bank accounts, applying for credit cards, initiating fixed deposits, and applying for safe deposit lockers, among others.
Additionally, RBI also announced the rebranding of the Bharat Bill Payment System (BBPS) to Bharat Connect.
