1. US rules out bailout for Silicon Valley Bank, auctions reportedly underway 2. Apple CEO Tim Cook backs AR/VR headset, likely to launch this year 3. Infosys’ Mohit Joshi joins Tech Mahindra as MD and CEO

RBI rejects ‘digital-only banks’, says it would pose systematic risks

digital-only banks-thefreenedia
Spread the love

The Reserve Bank of India (RBI) has rejected the concept of digital-only banks, citing pitfalls to the financial system, according to governor Shaktikanta Das on Friday.

Das stated that there is currently no proposal to regulate neobanks and urged existing banks and non-banks to use technology to deliver financial services.

“We had received suggestions on digital banks,” he said, “but we felt that the idea came with certain risks.” As a result, we have not accepted it at this time.” Niti Aayog, the government think tank, proposed setting up digital-only banks.

Why is the RBI keeping an eye on BNPL: Das also stated that, while the RBI is keeping an eye on companies that offer buy-now-pay-later products, it is not eager to regulate the domain just yet.

Claim Free Bets

Some of the leading BNPL startups include ZestMoney, Postpe, Simpl, and Lazypay, while large e-commerce firms such as Amazon and Flipkart also provide BNPL services to consumers.

The governor said that “buy-now-pay-later,” which is offered by several e-commerce companies, is a lending activity, and that “we must be careful and calibrated in our approach and not start interfering everywhere.”

Some major technological concerns include: Das is also concerned about the entry of Big Tech into the financial sector.

He claims that a wide range of companies, including social media, search engines, e-commerce, and even ride hailing, have begun to offer financial services.

“These companies have a massive amount of data, which has allowed them to provide tailored financial services to entities or individuals who do not have a credit history or collateral.”

    NISHA HIRANI

    NISHA HIRANI

    All Posts

    Related Post

    View All

    Bharadwaj’s million dollar smile after walking out o...

    December 9th, 2021 | DRISHTI SHARMA

    Spread the loveNagpur: Lawyer-activist Sudha Bharadwaj who was one of the accused in Elgar Parishad-Maoist links case unde...

    Your EMIs might increase, as RBI hikes it repo rate ...

    May 5th, 2022 | NISHA HIRANI

    Spread the loveNagpur: The Reserve Bank of India announced on Wednesday that it had raised the key repo rate by 40 basis p...

    China-Taiwan tensions: China to stand in a blue clou...

    August 4th, 2022 | NISHA HIRANI

    Spread the loveThe eruption of war between China and Taiwan would be a global catastrophe on a scale far greater than the ...