Government of India has constituted a steering committee on fintech-related issues.The committee has submitted its report to the Ministry of Finance and Corporate Affairs.
FinTech stands for financial technology and describes technologically enabled financial innovations.It is applied in financial services to help companies manage the financial aspects of their business including new software and applications, processes and business models.
The committee has recommended a comprehensive legal framework for consumer protection be put in place keeping in mind the rise of fintech and digital services.
The committee has recommended (a)unified database (stacks) for small industries and the agriculture sector (b)removing discriminatory regulatory barriers in digital payments infrastructure and (c)allowing non-banking financial companies(NBFCs) into agriculture credit.
The committee has also recommended (a)cash flow-based financing for micro, small and medium enterprises(MSMEs) (b)using drones and remote sensing to assess risk in agriculture credit and insurance and (c)increasing the use of artificial intelligence among state-owned banks
The report also highlights the positive impact of fintech innovations on sectors such as agriculture and MSMEs.It recommended NABARD to take immediate steps to create a credit registry for farmers with special thrust for use of fintech along with core banking solutions(CBS) by agri-financial institutions, including cooperative societies.
Further,the committee has also recommended modernisation and standardisation of land records by setting up a dedicated National Digital Land Records Mission in order to make available land ownership data on an online basis to financial institutions.
The panel has recommended adopting regulation technology (or RegTech) and use-cases by all financial-sector regulators making compliance with regulations easier, quicker, and effective.