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Fintech panel bats for virtual banks
Why is it in the news?
- The Fintech panel setup on various issues relating to the development of the fintech sector in India has submitted its report to the Finance Ministry.
- The panel was formed in March 2018 under the chairmanship of the Economic Affairs Secretary to look into how fintech can be used to enhance the financial inclusion of micro, small and medium enterprises.
Highlights of the Report
Recommendations of the panel:
- Allow the operation of virtual banks.
- Ease KYC procedures.
- Implement fintech to prevent fraud.
- Incentivise non-banking financial companies (NBFCs) to increase lending to the agriculture sector.
Virtual banking system:
- It is the system where banks do not need to set up branches and yet deliver the full-scale retail banking services ranging from extending loans, savings accounts, issuing cards and offering payment services through their app or website.
Fintech:
- FinTech is the business of using technology to improve financial services.
- These services are the ways in which consumers and businesses manage, move and store their money: paying, lending, saving, borrowing, investing and so on.
- Fintech firms are aiming to fragment the finance industry by making these services more efficient, convenient and accessible.
- The ‘tech’ in Fintech is the emergence of brand new technologies, such as Artificial Intelligence, blockchain, analytics and big data.
Source
The Hindu.