As a result, they have allowed the development of a unified payments interface (is i) monopoly payment by two players, google pay And phonepe Which has got 85 percent market share.
So, it’s a wake-up call for Indian banking, he said: “Wake up, you’ll see a large part of the traditional financial markets exit.”
Having said that, he said, “We have to keep in mind that consumer tech companies have revenue models outside of finance. For example, the advertising model or the e-commerce model. Banks may, by law, be subject to Section 6 of the Banking Regulation. as defined under the Act, cannot engage in non-financial business.”
So, there are serious issues about how you’re going to draw the lines and also, there’s an issue about financial stability, he said.
“I was reading an article that said that when you put a regulated entity in competition with a fintech or consumer technology, the standard approach to consumer tech is to play fast and loose on regulation and gain market share at a great speed. Is.
He said, “I am not against competition. All I am saying is that we need to ensure that in the name of better competitive service, we do not have a systemic and sustainability challenge at the same time.”
Recalling Prime Minister Narendra Modi’s claim that the most important aspect of digital development is consumer confidence which has to be protected at all costs.
“Therefore, we need to make sure that as we move to fintech and grow it, we also need to be clear that we do not betray trust,” he said.
On the domestic payments ecosystem, Kotak said that the Aadhaar Unique Identification (Aadhaar) for UPI payments as well as transactions are notable innovations and they can be exported globally.