Digital lending can make access to financial products and services fairer, more efficient and more inclusive. From a tertiary support role a few years ago, FinTech-led innovation is now at the heart of the design, pricing and delivery of financial products and services.
While the penetration of digital transactions in the financial sector is a financially inclusive development, its benefits and some downside risks are often linked. This is where a balanced approach needs to be followed so that the regulatory framework supports innovation while ensuring data security, privacy, consumer protection and confidentiality.
Digital transactions have systemic implications that prompted RBI to form a working group to study all aspects of digital lending activities in the regulated financial industry as well as by unregulated players so that a relevant regulatory approach is in place.
The working group will be composed of internal and external members.