NITI Aayog Releases Report on Digital Banks Proposes Licensing Regime
NITI Aayog released a report on digital banks, proposing a model and roadmap for licensing and regulatory regime for India. The report “focuses on avoiding any regulatory or policy arbitrage and providing a level playing field for incumbents as well as competitors,” it said in a statement.
Dilip Modi, Founder of Spice Money, said: “It is heartening to see NITI Aayog come up with a model and roadmap for India’s licensing and regulatory regime in its report on banks digital. and aims to provide a level playing field for existing and future entities, while avoiding any regulatory or political arbitrage.”
“Digital operations in our country have grown exponentially over the past few years due to the growing internet and smartphone penetration, with the pandemic acting as a catalyst. recognized the role of digital technology and fintech players, in meeting the needs of underserved areas of the country.We were fortunate to be part of this journey, providing customized solutions to the hinterlands of India, to meet the unique needs of these regions,” he said.
The report shows the issuance of a digitized bank license limited to a given applicant (the license would be limited in terms of volume/value of customers reviewed, etc.).
Also the issuance of a digitized “large-scale” banking license (dependent on the licensee’s acceptable execution in the administrative sandbox, including strike, board prudential and mechanical play). The report also maps common courses of action in this space and presents the difficulties introduced by the neo-banking “organizational model” – which arose in India due to an administrative vacuum and without even a trace of digitized bank authorization.
“This roadmap from NITI Aayog will further assist digital banks in gaining clearer guidelines to provide sound banking infrastructure in rural areas which contribute greatly to the country’s GDP and where the majority of the population resides. Not only this roadmap road will help streamline efforts to bring this significant portion of India’s underserved population to the forefront of the formal banking sector, but also encourage more players to enter the market, which will benefit the citizens of Bharat and the will ultimately help achieve financial freedom,” said Dilip Modi.