10 Points on boosting Fintech Sector

Steering Committee on Fintech Recommendations:

1. Virtual Banking System: Department of Financial Services and the Reserve Bank of India may examine the suitability of virtual banking system’ in the Indian context, costs and benefits regarding allowing virtual banks and prepare for a possible future scenario where banks do not need to set up branches and yet deliver the full-scale retail banking services ranging from extending loans, savings accounts, issuing cards and offering payment services through their app or website.
2. Level Playing Field: The panel had also urged the government and the RBI to take steps to eliminate any discrimination in access to payment infrastructure to non-banks as compared to banks, with a view to enhance competition and innovation.
3. Fintech for Security: The committee recommends the use of fintech, especially by PSE [public sector enterprise] financial service companies to bolster cybersecurity, fraud control and anti-money laundering.
4. Encourage Private Players: The committee also recommends that fintech firms specialising in this field should be encouraged to set up their businesses in India.
5. NBFC for Farms: NBFCs had made significant progress in leveraging fintech to increase their outreach, such companies should be incentivised to “work in the agricultural space by including them in credit guarantee schemes.”
6. Ease KYC Compliance: In a bid to ease the KYC process, the committee recommended that various options, including video-based KYC, making available validated electronic versions of KYC-related documents through a DigiLocker, and making these available for verification by service providers with customer consent, be considered early.
7. Harness Tech for Insurance: The Committee recommends that insurance companies and lending agencies in the agri sector should be encouraged to use drone and remote sensing technology, directly or using services of fintech companies, to assess discrepancies in self-reported cropping patterns and crop cutting experiment processes, enabling more efficient delivery of both credit and insurance products and reduce credit/insurance risks.
8. Digitisation of Land Records: Committee said the government should take up “on a war footing” was the digitisation of land records and also recommended a deadline of three years within which this must be completed.
9. Consumer Protection Framework: Committee said that a legal framework for consumer protection should be put in place early keeping in mind the rise of fintech and digital services, and also said a law must also be enacted for this.
10. Ease Access to Social Schemes: To further ease access to pension schemes and small savings schemes, the committee recommended that a common digital platform be created for all micro-pension schemes and Government pension schemes through which pension subscribers can subscribe to specific schemes seamlessly and reduce access barriers by allowing payments through various modes such as Jan Dhan Yojana accounts, debit cards, credit cards, internet banking, mobile wallets, etc.