Financial technology players should look at areas like green finance as well the underserved demographic categories, Finance Minister Nirmala Sitharaman said on September 20, while seeking more engagement between the government and the industry.
“There are opportunities for fintech players to play the role in a sustainable financial environment,” Sitharaman said in her address at the Global Fintech Fest. “Fintech may locate promising growth opportunities in India’s demographic growth transformation and with some players who can opt for full service offering to boost access for specific underserved demographic.”
India’s fast-growing fintech industry is being brought under greater regulation.
The Reserve Bank of India has asked all digital lenders including fintechs, banks and non-banking finance companies to comply with its norms by end of November.
The digital lending framework is designed to strike a balance between innovation and protect consumer interests, RBI Deputy Governor M Rajeshwar Rao said on September 8.
The finance ministry is also seeking to curb illegal lending apps and has asked the Reserve Bank of India to prepare a 'whitelist' of all legal applications. Others will be banned from app stores.
The next wave in fintech could be cash flow-based lending to micro, small and medium enterprises, based on GST invoices, and using account aggregators and united payments interface, V Anantha Nageswaran, India's chief economic adviser said at the Global Fintech Fest.
Meanwhile, there is need to ensure that cash-flow based lending apps do not exploit borrowers. Such apps must make information available to borrowers in local languages, the adviser said.
Talk more to the government
Finance Minister Sitharaman at the Global Fintech Fest asked the industry to be in constant engagement with the government, across all levels.
"Distance brings distrust. So, cut the distance down. Have greater engagement with government,” she said. “The greater the engagement, the greater the trust which gets built up.”