India’s economy became the fastest growing major economy, superseding China in the last quarter of 2014. With the potential of becoming the world’s third largest economy, India is no stranger to innovations in fintech. As a matter of fact, Prime Minister Narendra Modi has made it his mission to build greater financial inclusion for his country through initiatives like the creation of payment banks and tax incentives to encourage faster adoption of electronic payments. He asked the Reserve Bank to prepare a 20-year road map for financial inclusion and encouraged banks to give loans to the poor, especially farmers.
The Prime Minister added that financial inclusion should not remain a government program, but should become an “article of faith”.
Let’s take a closer look at how India is rapidly developing its fintech sector and how that will shape its economic future.
A Fintech GIFT that Keeps on Giving?
As India recently celebrated the anniversary of its independence from Britain, thoughts turn to economic independence through the creation of a proposed financial center that the government hopes will rival the likes of Canary Wharf in the UK and Jersey City in the U.S. The Gujarat International Finance Tec-City (GIFT) is an ambitious attempt to leverage the strong economic growth and well-educated workforce in India to build a world-class fintech hub. What will it take for this project to succeed?
Source: Daily Fintech
Payments Banks: An Indian Approach to Financial Inclusion
The Reserve Bank of India has granted “in-principle approval” to create 11 payments banks in India. This new type of bank is geared toward providing accessible and affordable financial services such as savings accounts and low-fee remittance services to migrant laborers, low-income households, and small businesses. Payments banks differ from conventional banks by virtue of the fact that they do not offer loans but provide all other banking services, including accepting deposits and paying bills.
Source: Business Insider India
India’s First Global E-Wallet Launched
Through a co-branding partnership, Citibank India and MasterCard have launched Citi MasterPass, the first global digital wallet in India. A spokesperson for Citibank India said that the number of eCommerce transactions by their customers has increased by 76 percent in the last two years alone. By providing the Citi MasterPass service, it is hoped that consumers will adopt this online payment method, which promises significantly faster checkout times and secure transactions at over 250,000 eCommerce merchants worldwide.
Source: FinTech Innovation
India to Create Centralized Registry for Financial Transactions
The Indian finance ministry has announced that it is setting up a national know your customer (KYC) registry that will ease the bureaucratic burden when signing up for new financial services. The new central registry will be used by all banks, insurance companies, and stock market intermediaries in India. Currently, customers are required to go through the KYC process every time they wish to open an account, even within the same institution. Going forward, customers will only need to do this once and use a unique KYC identifier that can be referenced when opening future accounts.
Source: The Economic Times
New Contactless Payments Solution Launched in Mumbai
InfrasoftTech, a Mumbai-based multinational technology firm focused on digital solutions for banking and financial services, has launched QRys (read as Curious). This new product enables quick and secure contactless and card-less payments for retail purchases using QR codes and NFC chips built into the latest smartphones. In addition, QRys can also be used for card-less cash withdrawals from ATMs and other related services.
Source: The Financial Express
10 Fintech Startups Seeking to Disrupt Digital Payments in India
As Indian Prime Minister Modi continues to actively promote his agenda to increase financial inclusion through innovations such as digital payments, several home-grown fintech startups are rising to the challenge. Here’s a list of 10 India-based companies that are looking to unseat cash by making digital payments king.
Source: The Economic Times
It’s clearly an exciting time to be part of fintech in India with so much potential to improve the quality of life for hundreds of millions of people. Now that economic growth in China is cooling off, will businesses shift to India?