On September 2, 2019, An Inter-Ministerial committee set up by the Ministry of Finance, Department of Economic Affairs, Government of India(GoI) on Fintech (Financial technology) related issues headed by Shri Atanu Chakraborty, DEA(Department of Economic Affairs) Secretary, submitted its final report “‘Steering Committee on Fintech related issues 2019 ” to the Finance and Corporate Affairs Minister Nirmala Sitharaman in New Delhi.
Key recommendation:
i. Framework: In a view to protect consumers from digital services, the panel recommends to form a comprehensive legal framework.
ii. Development of Fintech space: The report highlights the present landscape of the Fintech space in India as well as globally. It documents key issues relating to the development of Fintech & makes recommendations focusing on how fintech can be leveraged to promote the financial inclusion of MSMEs(Micro, Small and Medium Enterprises).
iii.Financing: The panel in its report recommends that the RBI(Reserve Bank of India) may consider using fintech in financing space for MSMEs in the form of cash-flow basis, development of an open-API MSME stack (Application Programming Interface) based on TReDS data(Trade Receivable Discounting System) verified by GSTN(Goods and Service Tax Network) & a standardised and trusted e-invoice infrastructure designed around TReDS-GSTN integration.
iv. Technology and risk reduction: It recommends the ministry to encourage insurance companies and lending firms to use drone and remote sensing technology for cropland, damage and location assessments to help risk reduction in insurance/lending business & also recommends Department of Financial Services(DFS) to jointly work with PSU(public sector undertaking) banks to reduce fraud and security risks.
v. Credit registry for farmers: It recommends NABARD (National Bank for Agriculture and Rural Development )to create a credit registry for farmers by using fintech along with core banking solutions (CBS) offered by agri-financial institutions, including cooperative societies.
vi. Digitization of Land records: The panel suggested to set up dedicated National Digital Land Records Mission based on a common National Land Records Standards with State Land and Registration departments for standardization & modernization of land records to make land ownership data online to financial entities.
vii.Progress review: The panel also favoured to set up an inter-ministerial steering committee on fintech applications in the department of economic affairs (DEA) to monitor the progress of the report.
viii.Adoption of RegTech: It has also recommended adoption of regulation technology (or RegTech) by all financial sector regulators and develop an institutional framework for specific use-cases of supervisory technology (or SupTech).
ix. Setting up of team for coordination on FinTech: A dedicated team on Digital Economy and Fintech is being set up in the Investment Division, Department of Economic Affairs, Ministry of Finance for coordination on FinTech with relevant Ministries.
Others: The other members of the committee are Secretary (MeitY), Secretary (DFS), Secretary (MSME), Chairperson (CBIC), CEO (UIDAI), Deputy Governor (RBI), Executive Director (SEBI), CEO, Invest India with Additional Secretary (Investment).