Fintech innovations will not change basic nature of financial system: RBI DG T. Rabi Sankar

This efficiency is driven largely by three factors, digitization of information which can then be accessed, processed and transmitted with ease, and more direct interface between buyers and sellers, between borrowers and lenders, and between payers and receivers, which optimizes transaction change.

Sankar added that fast communication channels that expands the reach of the financial system. "Put together these efficiencies lead to lower cost, quicker transactions and better inclusion."

On self-regulatory organisations front, Sankar said these entities could play a pivotal role in the fintech industry by promoting responsible practices and maintaining ethical standards.

"These industrial made bodies establish guidelines and code of conduct that foster transparency, fair competition and consumer protection," RBI deputy governor said.

By productively addressing issues like market integrity, conduct, among consumers, data privacy, cyber security and risk management, SROs help build trust among consumers, investors and regulators, Sankar added.

In July, T. Tabi Sankar at Moneycontrol start-up conclave said the central bank may bring regulations for the fintech companies after consultation with the industry.

He added that they are working on these regulations on these entities and ecosystem.

Further, Moneycontrol reported that Indian fintech companies are pitching for simpler know-your-customer norms for lending to small businesses and easier access to cheaper capital for priority sector lending after the comments by the T. Rabi Sankar.