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RBI: Digital Payments Pave Way for Credit, Insurance
11 Sep
Summary
- Digital payments success must extend to credit and insurance.
- Technology should widen formal credit access for underserved.
- Regulated entities remain accountable for services delivered.
Reserve Bank of India (RBI) deputy governor Shirish Chandra Murmu has highlighted the imperative to extend the success of digital payments into credit, savings, and insurance. He believes technology's role should be to broaden formal credit access for previously underserved populations, rather than just accelerating existing lending processes.
Murmu underscored that while technology can distribute financial services, it cannot absolve regulated entities of responsibility. Lenders must ensure borrowers understand loan terms and costs. Senior management and boards need to comprehend the models they deploy, their limitations, and the consequences of their use, ensuring human accountability strengthens as finance automates.
Speaking at the Global Fintech Fest, Murmu noted that fruit and vegetable vendors with QR codes are already part of the formal system. The next crucial step is offering them credit under understandable terms. He also mentioned the RBI is assessing responses to its draft norms concerning revolving credit products.
