MUMBAI: Cordoning off data to the fintech industry citing privacy concerns will not just hamper the growth potential of this sector, but also slow down the government’s aim to create a financially inclusive society, finance secretary Subhash Chandra Garg said. The government is working on a data protection Bill, whereby “financial institutions will get access to data under a secure data protection framework”, he said.
“Our aim is to not just create a data protection Bill but to create a data usage Bill,” Garg said, addressing a fintech industry gathering here. “We don’t want data to become unused oil.”
Garg, who is also the economic affairs secretary, said the Supreme Court’s Aadhaar verdict, which prohibited fintech companies to use UIDAI database for customer authentication, was a “setback” for the financial services sector.
While pointing out that data in today’s digital age was synonymous with personal identity, Garg said the government in its data protection Bill would try to establish a reasonable compromise between data security and data availability.
The Justice Srikrishna Committee had submitted a draft of the Personal Data Protection Bill to the government in July last year. The Ministry or Electronics and Information Technology in August submitted feedbacks on the proposed law. Garg said the draft was undergoing further internal scrutiny to ensure that a more holistic and balanced Bill was tabled in Parliament.
During his address, Garg said the government would very soon publish a fintech policy report which would have 40-50 recommendations on issues “directly and indirectly catering to the fintech industry”.
The growth of the fintech industry is imperative for an inclusive and digitally driven economy, he said.
“Financial incumbents like banks will have to collaborate with fintech companies to better their product and stay relevant,” the secretary said. “Within the fintech industry, we have seen the payments sector growing at a rapid pace but other aspects such as credit disbursement and pension to have not grown so much. We are looking at possible solutions to address these problems.”
Garg said the Centre was content with the Reserve Bank of India’s openness in considering different regulatory approaches to govern the payments space through new experiments.
“We are working closely with the RBI to ensure the growth of the fintech industry,” he said.
An inter-ministerial committee in August 2018 had published a policy recommendation report which called for the need for an independent regulatory board for the burgeoning payments ecosystem over the existing regulator, RBI.
Source: Economic Times