BackFinMin set to issue policy norms for fintech sector
Panel to suggest how fintech can be leveraged for financial inclusion of MSMEsThe panel looked at the regulatory regime for the fintech space and explored the creation ‘sandbox model’
PremiumNEW DELHI : The finance ministry will soon come out with a report on fintech or financial technology that will spell out the broad policy and regulatory guidelines to boost growth in the sector.
An eight-member steering committee that was constituted in March last year, headed by finance secretary Subhash Chandra Garg, has finalised the report and is expected to release it soon after the conclusion of the general elections, two finance ministry officials said, requesting anonymity.
“The report has been finalised. We can’t make it public at the moment, due to model code of conduct guidelines issued. But it will be released after election is over (23 May)," one of the two officials cited above said.
The report will not only find ways to make it easier for fintech companies to do business, but also focus on how fintech can be leveraged to enhance financial inclusion of micro, small and medium enterprises (MSMEs).
In his budget 2018-19 speech, finance minister Arun Jaitley said that the use of fintech will help the growth of MSMEs.
While finance ministry’s department of economic affairs will spearhead policy-related developments for the sector, there will not be a single or a specific regulator that will look at various issues related to the sector.
“Fintech business is spread across various sectors. As a result, there will not be any particular regulator. It will depend on the sector and the issue. RBI will look into any payments-related issue, but if it is some other problem, the company can approach the concerned ministry or regulator," the official said.
Ajay Prakash Sawhney, ministry of electronics and information technology secretary, financial services secretary Rajeev Kumar, MSME secretary Arun Kumar Panda, among others, were a part of the panel, that took stock of the developments in the fintech sector globally, as well as in the country. It also looked at global cooperation in the fintech space with countries including Singapore, the UK and China.
The committee also looked at the regulatory regime for the fintech space and also explored the creation ‘sandbox model’ that will facilitate the introduction of new products.
Sandbox is a hub where regulators enable limited roll-out of new products on small group of users before scaling up, which can help fintech companies launch innovative products at a lower cost and in less time.
“There are some areas where there can be state and central government support and intervention (for fintech companies). Although there is a policy specifically for startups, there could be more policy guidelines aligned with amiable regulations, such as setting up of regulatory sandbox. Besides, much more can be done for attracting investment that are not restricted to select categories/sectors," said Vivek Belgavi, partner at PwC India.
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