Report of the Working Group on FinTech and Digital Banking

The Reserve Bank of India (RBI) published the Report of the Working Group on FinTech and Digital Banking,  a committee representative of all the financial sector regulators  and select industry members ‘to study the entire gamut of regulatory issues relating to FinTech and Digital Banking in India.’ The composition of the Working Group includes representatives from the Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA) and ‘select financial entities regulated by these agencies, rating agencies… and FinTech consultants / companies.’

(This document has been superseded by the Draft Enabling Framework for Regulatory Sandbox released in April 2019.)

Terms of Reference of the Working Group

  • i. To undertake a scoping exercise to gain a general understanding of the major FinTech innovations / developments, counterparties / entities, technology platforms involved and how markets, and the financial sector in particular, are adopting new delivery channels, products and technologies;
  • ii. To assess opportunities and risks arising for the financial system from digitisation and use of financial technology, and how these can be utilised for optimising financial product innovation and delivery to the benefit of users / customers and other stakeholders.
  • iii. To assess the implications and challenges for the various financial sector functions such as intermediation, clearing, payments being taken up by nonfinancial entities.
  • iv. To examine cross country practices in the matter, to study models of successful regulatory responses to disruption across the globe.
  • v. To chalk out appropriate regulatory response with a view to re-aligning / reorienting regulatory guidelines and statutory provisions for enhancing FinTech.

Table of Contents from the Report of the Working Group

Background, Terms of Reference, Methodology & Members of the Group
Executive Summary……………………………………………………………………….. 1
1. Introduction……………………………………………………………………………... 5
1.1. FinTech and Financial Market disruptions………………………………………. 5
1.2. FinTech: Definitions and scope…………………………………………………... 5
2. FinTech and its impact on Global Financial Services…………………………… 7
2.1. FinTech innovations, products and technology…………………………………. 7
2.2. FinTech innovations and their impact on global financial services……………15
3. FinTech and its impact on Indian Financial Services…………………………….17
3.1. FinTech innovations, products and technology………………………………….17
3.2. Innovations in Digital Banking and investment services in India………………22
3.3. Scope for Growth of FinTech and digital banking in India………….…………..26
4. Recent global regulatory Initiatives on FinTech…………………………………..27
4.1. Global experiences on regulatory actions………………………………………..27
4.2. Regulatory Sandboxes/Innovation Hub…………………………………………..29
4.3. Regulatory response in other jurisdictions………………………………….…….45
5. Emerging Regulatory and Supervisory issues in India…………………….…….47
5.1. Regulatory and Supervisory response in India……………………………….….47
5.2. Impact on Financial inclusion………………………………………………….…...49
5.3. Initiatives taken by other financial market regulators in India…………….…….49
5.4. Cyber security and FinTech…………………………………………………….….51
6. Way Forward – for stakeholders………………………………………….…….….…57
6.1. Regulation……………………………………………………………………..…..…57
6.2. Supervision……………………………………………………………………..…....64
6.3. Banks / NBFCs/Securities Markets/Insurance Companies……………..…..….65
6.4. Data Security, Privacy and Fraud prevention………….………………….……..66
6.5. Government……………………………………………………………….……....…66
6.6. Consumers………………………………………………………………….………..67
7. List of Recommendations……………………………………………………………...68
Annexes………………………………………………………………………………….…….71
References / Bibliography, Abbreviations………………………………………………73

 

 

 

 

Document Details

Document Type: 
Document Topic: 
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Year of Document: 
2017
Date of Document: 
Thursday, November 23, 2017
Document Authors: 
Reserve Bank of India
Language (This Document): 
English

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