Why Rbi Is Wary Of Large Tech Companies Entering The Finance Sector

In India, fintech has been entering businesses that are beyond the scope of just one regulator. The most popular ones are in the payments space through the domestic unified payments system. Others deal in equity markets, mutual funds and insurance. In the initial days fintechs were seen as a competition to the banking sector, but they later evolved as a partner to several traditional banks and non-bank lenders. We are now in a phase where banks are ramping up investments in technology and a section of large lenders believe they would leave nimbler fintechs behind in the race for customers.

Have RBI and such firms locked horns?

RBI was reportedly scrutinizing a deal between Google Pay and Equitas Small Finance Bank, announced last September. It was meant to allow customers use Google Pay to open fixed deposits with Equitas. RBI’s concerns could have risen from the involvement of a large tech company in garnering customer deposits, but the payment app of Google is understood to be meant only for distribution of the product. RBI deputy governor M. Rajeshwar Rao had said last October that the entry of BigTech into the financial sector is a global phenomenon, engaging the attention of central banks around the world.

What is RBI’s stance on data storage by foreign firms?

In April 2018,…