The government has set up a steering committee to find ways to help ease regulations and boost entrepreneurship in the financial technology sector.
The eight-member panel is being led by the Department of Economic Affairs secretary Subhash Chandra Garg. Other members include top functionaries from the ministry of electronics and information technology, Central Board of Excise and Customs, UIDAI and the Reserve Bank of India.
In a note to the press, the government highlights that the panel will find ways of using fintech in “critical sectors of the economy”, including the financing of micro, small and medium enterprises (MSMEs), delivery of e-services to the vulnerable sections of society, and management of land records and other government services.
Finance minister Arun Jaitley, in his 2018-19 budget speech had talked about the use of fintech to help grow of MSMEs.
Another key objective for the panel will be to look into the regulatory regime for the fintech industry and explore the creation of a regulatory ‘sandbox model’ to foster new ideas. A sandbox model is one where regulators allow for limited roll-out of experimental new products to customers and assess its impact and flaws before considering it for a full-scale roll-out; a sort of beta test.
The panel will also examine means of using data available with Goods and Services Tax (GST) Network, the company that processes indirect tax returns, and information utilities such as credit information companies to make applications for financing of MSMEs, the press note said.
Another stated agenda is the exploring the creation and use of unique enterprise identification number, sort of an Aadhaar for companies something finance minister Jaitley had also alluded to in his budget speech.
Unsurprisingly there is no mention of cryptocurrency in the agenda set by the panel. Despite being the most talked about commodities in the global fintech space, cryptocurrencies are not something the government is very keen on. In his budget speech, the finance minister had said the government currently does not consider cryptocurrencies to be legal tender and had said that the government will take all measures to eliminate the use of crypto assets in the payment system.
According to a report by industry lobby group Federation of Indian Chambers of Commerce and Industry (FICCI), the global fintech sector is expected to reach $45 billion in value by 2020, while growing at 7.1%. The Indian fintech market is expected to reach $2.4 billion by the same time.