The change in governors of the Reserve Bank of India is no small news, as India is well known for its governmental help with the furtherance of technology in general and fintech in particular.
Under the outgoing governor, Raghuram Rajan, RBI decided to give 11 companies licenses to set up payment banks for the underserved population of the country and this is expected to give rise to an increase in the use of digital banks and wallets. RBI also recently put together a working group of RBI, banking and payments executives to study regulatory issues related to digital banking and fintech.
While there has been much hand wringing over incoming governor Urjit Patel’s philosophies on monetary policies, there is excitement from at least one of those on the front lines of payments business. There have been predictions of explosive digital payment growth in India.
Harshil Mathur, CEO of PF Razorpay, is optimistic about the continued support from RBI. His company was an early adopter of the Unified Payments Interface (UPI), launched in April, which acts as sort of an e-payment that users can authenticate using their mobile phones. Existing bank apps can be UPI-enabled or have UPI apps. Customers can have a unique virtual identity for a bank account that they then can use to make digital transactions. It’s an improvement on RBI’s Immediate Payment Service (IMPS).
“The RBI has always extended great support and guidance to the Indian fintech companies,” Mathur says. “Be it IMPS or UPI, the RBI has played an important role, along with National Payments Corporation of India, in revolutionizing the payments industry. (Patel) coming on board is a promise to build and strengthen the already robust payments infrastructure.
“The growing collaboration between Central Bank of India and the fintech industry has made our nation come one step closer to being cashless, thus realising the dream to be a digital economy.”