RBI Guv to fintechs: Serving privileged will ring-in profits, but focus on underserved

Mumbai, Oct 8 (PTI) Reserve Bank Governor Sanjay Malhotra on Wednesday exhorted the fledgling fintech ecosystem to focus on the underserved sections of the society to deepen financial inclusion.

Speaking at the annual Global Fintech Fest here, Malhotra accepted that serving the "privileged" will be a lucrative business, but urged the smaller companies to focus on the underserved.

"Build for inclusion. While there may be higher profits to be made by deepening access to the haves and the privileged. Prioritise building systems to expand financial services to the unaccessed, the unreached and the unserved segments of society," he told a packed hall comprising stakeholders of the fintech ecosystem.

Malhotra also asked the fintech companies to design products and services that are easy to use, accessible for all, with assistive technologies which will ensure that the vulnerable groups such as the senior citizens, individuals with limited digital literacy and the specially-abled are not left behind.

There is a need for Indian fintechs to "prioritise" trust and compliance, Malhotra said, adding that they should embed strong data protection, transparency and safeguards for consumers in every offering of theirs.

The number of Indian fintechs has grown to 10,000 and these companies have collectively raised over USD 40 billion over the last decade, the career bureaucrat-turned-central banker said.

Stating that tech can be a force multiplier for sustainable economic development, Malhotra appreciated fintechs for delivering financial services at population scale and at affordable costs.

He also asked the fintech ecosystem to focus on extending credit to make best use of the available infrastructure created over the last few years and ensure that the small businesses and individuals get credit.

Besides, fintechs must also focus on the customer in such a way that there is no need for putting in place a customer service agent.

The RBI governor further said that digital frauds are "becoming a problem" for the Reserve Bank.

The MuleHunter solution developed by an arm of the central bank is currently being used by 21 banks and has shown a 90 per cent success rate in tracking down accounts used by bad actors by creating a complex web of accounts which are used to swindle funds after an unsuspecting person is defrauded.

Malhotra said there is a need for the 17 account aggregators to integrate more financial information and adopt interoperable features in order to be more successful.

The Reserve Bank is also in the process of introducing standards designed to improve customer onboarding processes, enhance user interfaces, strengthen data security and increase awareness under the account aggregator framework, he said.

Speaking of the unmet credit demand in the country, he said the recently launched unified lending interface can help bridge the gap through easier access, and adding that credit is the "lifeblood" of inclusive growth.

He said the Reserve Bank has conceptualised "unified markets interface" as a new next generation financial market infrastructure.

"This interface will have the capability to tokenise financial assets and settlements using wholesale CBDC (central bank digital currency)," he said, adding that early efforts are encouraging.

Meanwhile, IT major Infosys' co-founder and non-executive chairman Nandan Nilekani said that the 'Finternet' ecosystem, which he has been evangelizing for some time, will go live in 2026.

He said the number of people who have signed up for Fininternet, which is being touted as a a vision for a future financial system that is a unified, interconnected, and user-centric ecosystem, is growing a lot.

It is expected to bring assets such as land, property, bonds, financial investments on a single platform, where it gets tokenized.

The National Payments Corporation of India (NPCI) launched a slew of initiatives on Wednesday, including AI-based UPI HELP powered by its Small Language Model (SLM) that will assist in payments, mandates, and dispute resolution.

It also launched an IoT (internet of things) payments with UPI for enabling transactions directly from connected devices such as cars, smart TVs, and wearables, and 'banking connect', which is an interoperable net banking solution.

The body also introduced 'UPI Reserve Pay' which will allow users to securely block and manage credit limits for specific purposes across merchant and UPI apps. PTI AA HVA