Fintech players eating into biz of banks: RBI Deputy Guv

Beena Parmar MoneycontrolReserve Bank of India Deputy Governor R Gandhi on Wednesday issued a warning about the possibility of innovation being misused since banking services are no longer exclusive to banks."Banking is longer what a bank does. It is also what a non-bank does," Gandhi told bankers and members of non-banking entitities gathered at the first Fin Tech Summit organised by FICCI, Nasscom and the Indian Banks' Association.  Gandhi said that specialised financial technology startups were eating into the business of banks and growing exponentially.  "Chucking away banking from the banks has enabled enormous business and growth for these non-banks. With specialisation and focus on services, they are able to offer services in an efficient and cost-beffective manner," he said. On regulations for the overlap of services by fintech players, Gandhi said that the central bank has received suggestions on such peer-to-peer lenders."We have already come up with a discussion paper. We have received comments. Soon we will be able to finalise [regulations]," Gandhi said on the sidelines of the event.

He also addressed the popularity of virtual currencies such as Bitcoins and expressed skepticism about its spread. 

“The emergence of Bitcoins has led to some quarters predicting the end of the currency system itself,” he said. “In my mind it may remain a pipe dream that block-chain will eliminate currency.”