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EXCLUSIVE


‘INDIA HAS ALREADY CROSSED AMBITIOUS 10-TRILLION MARK IN DIGITAL ECONOMY’: EXEC
DIR, RBI

Reserve Bank of India ED, Vivek Deep spoke in detail on India's digital payments
infrastructure, how the country crossed the estimated 10-trillion mark in
digital economy, what new initiatives RBI is working on to further aid the
growth and much more.

 * Anushka Sengupta
 * ETBFSI
 * September 28, 2022, 08:00 IST

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The 10-trillion mark in the digital payments industry is ambitious at all as
India has already crossed the target in the digital payments industry, said
Vivek Deep, Executive Director, Reserve Bank of India.

"For the $ 10 trillion target that the report says, it may only include the
retail transactions, it doesn't contain the large business transactions at all,
as in that way even today if we include all those, which are after all part of
digital transactions, in that case we have already crossed $ 22 trillion, so the
target is already achieved," he said.



Leading global and Indian fintech players have been key drivers of UPI adoption
in India among end users, aided by buildout of a large QR-code based merchant
acceptance network, and further supported by user-friendly interfaces,
innovative offerings and an open API ecosystem.

It is to be noted that as per the report by BCG Consulting, India's digital
payments market is at an inflection point and is expected to increase more than
threefold from the current US$3 trillion to US$10 trillion by 2026.

The report by BCG also additionally states that digital payments will constitute
nearly 65% of all payments by 2026, up from 40% today and there would be a 7x
growth in digital merchant payments - from US $ 0.3-0.4 trillion today to US $
2.5-2.7 trillion by 2026.

As a result of this unprecedented growth, digital payments (non-cash) will
constitute 2 out of 3 payment transactions by 2026, the report highlighted.



Geo-Tagging of Payment Infrastructure

Vivek Deep bets strong on India's digital economy however, Deep also highlighted
that reaching such a major milestone we shouldn't be content yet, sitting on our
laurels, as there's still a lot to do.

The RBI ED also brought to everyone's attention a task RBI is set on, which is
the geo-tagging of the payment systems and explained the need of this initiative
and the motif of the regulator behind.



"One thing that we have started thinking on is geo-tagging of the payment
infrastructure. So, with geo-tagging we hope to understand what is the
geographical location of the extent infrastructure that we have and that will
give us an idea as to what is the type of concentration , which are the areas
which are lagging so that we can concentrate there in terms of building the
infrastructure," he said.

He also said that the PIDF fund is in compliment to the geo-tagging initiative
and the regulator would want to build the much-needed infrastructure in the
areas where it is lagging.

Vivek Deep remarks came while speaking at the Global FinTech Fest, 2022 in
Mumbai.


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   have already seen the adoption by all banks based on the JAM trinity. This
   has led to an explosion in FinTechs working with banks, and a lot of that is
   actually directed to how finance or credit can reach SMEs. So, we have
   finally reached a point ready for takeoff,” said S Ramann, CMD, SIDBI at the
   fourth edition of ETBFSI CXO Conclave 2022. Highlighting SIDBI's role of
   being at the forefront with banks apart from just being a direct lender to
   businesses Ramann said, "Our real hope as SIDBI is that we should be at the
   forefront with the banks, helping them make this transition in whatever way
   we can and that's what SIDBI's role is, apart from being a direct lender to
   the SMEs, the idea is to build the ecosystem." He spoke on various
   interesting topics like SIDBI's role in digital transition in the lending
   business, credit access to small businesses, and digital credit mechanisms
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EXCLUSIVE


INDIAN FINTECH MARKET TO RECORD ‘10 TIMES’ GROWTH; ACHIEVE $1TN IN AUM, $200BN
IN REVENUE BY 2030

India is now being recognized as one of the largest FinTech unicorn ecosystems,
home to 21 FinTech Unicorns as of March 2022.

 * ETBFSI

Click Here to Read This Story
 * 
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 * 

Indian Fintech market is expected to record a 10 times growth to achieve $1Tn in
Assets Under Management (AUM) and $200Bn in revenue, said the report titled ‘$1
Tn India FinTech Opportunity'.

The report released by Chiratae Ventures in collaboration with Ernest and Young
(EY), highlighted that much of the growth will be driven by the digital lending
market, which is expected to grow to $515 Bn in book size by 2030.

The market is expected to reach $1Tn in AUM with contribution from lending to be
highest at 50%+, while from a revenue standpoint payments and lending make 75%+
of the pool, the report highlighted.



India is now being recognized as one of the largest FinTech unicorn ecosystems,
home to 21 FinTech Unicorns as of March 2022. An organic and collaborative
ecosystem is driving this growth, which is being supported by key government
initiatives, such as Digital India, Smart City, the development of UPI, and
other initiatives.

Payments, Digital Lending, WealthTech, InsurTech, and Neo-banking will all be
contributing to growth in the FinTech space with Agri+FinTech and Prop+FinTech
considered to be big bets.

Tailwinds due to favorable demographics, growing technology adoption, higher
disposable incomes, and aware customer are further fuelling this growth.
Fintechs have been innovating in product and delivery to cater to the evolving
needs of the customers.

The report also highlights that Buy Now Pay Later has become mainstream and is
on an accelerated growth trajectory, emerging strong not only in B2C but also in
the B2B payments space.

On the launch of the report Sudhir Sethi, Founder, and Chairperson, Chiratae
Ventures said, “The Indian Fintech market has been a formidable global force,
contributing to the largest share of unicorns in India. We have been a
technology-first investor believing in the power of both data and technology and
hence have backed companies such as EarlySalary, Kristal.ai, PB Fintech, ShopSe,
and Vayana amongst others”



Co-lending to emerge as a preferred model that supports lending partners in
mitigating their risk exposure. New asset classes, Crypto & NFT will also
continue to attract investor interest as fintech continues to solve for
traditionally underserved customers.

Technology-based Innovation on the underwriting side of the insurance value
chain will help deliver solutions for the highly unpenetrated market at
affordable rates.

“FinTechs have innovated for the underserved financial markets through a strong
and supportive ecosystem, which will continue to keep accelerating growth and
penetration of Fintech in India. These include fast-growing digital adoption and
mobile penetration on the back of the cheapest data rates in the world offered
by private telecom players, to enabling regulatory environment coupled with
world-leading digital infrastructure (Aadhar, UPI, BBPS etc.), and structural
reforms and initiatives (GST, TReDSetc.),” said TC Meenakshi Sundaram,
Co-Founder and Vice Chairperson, Chiratae Ventures.

“We also expect FinTechs to continue solving for the substantial and growing
sub-markets with novel solutions,” he added.

With 5X growth in the digital tech talent, India has the opportunity to address
the global digital skill gap and establish itself as the destination of digital
and tech talent.

“India is recognized as a strong FinTech hub globally and is increasingly
becoming a talent destination for fintech businesses. We are glad to partner
with Chiratae Ventures and delve into the emerging trends in regulatory
innovation, technology advancements, new business models, industry convergence,
and inclusive digital financial services in the Indian fintech space,” said
Rajiv Memani, Chairman and Managing Partner, EY India.

The report also highlighted that the regulatory support will enable the industry
further as already established models go international through collaborations.

The actively encouraging innovation through regulatory sandboxes, new
distribution models, and the launch of innovative products has provided a good
regulatory environment.



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