Future of financing in India is through digitisation, says FM

Finance Minister Nirmala Sitharaman on Tuesday said that future of financing in India is going to be governed through digitisation, noting that in July 2022 alone, 6.2 billion transactions worth Rs10.6 trillion were conducted.

Addressing the FICCI LEADS summit here, she said that unified Payments Interface (UPI) is aiming to achieve a target of 1 billion transactions in a day in the next five years.

Today, even if there is no brick or mortar bank branches in rural areas, people are able to access banking facilities due to digitisation of financial services, Sitharaman added.

The Finance Minister also said that the role of Artificial Intelligence would be significant in detecting economic crimes.

She further said that the method of account aggregation is now being used by scheduled commercial banks.

As many as 1.1 billion bank accounts are sharing their data on account aggregators now, Sitharaman said.

Account aggregation, also known as financial data aggregation, is a method that involves compiling information from different accounts, which may include bank accounts, credit card accounts, investment accounts, and other consumer or business accounts, into a single place.

The Finance Minister further said that startups linked to fintech entities are rising, adding that 87 per cent fintech companies are adopting digital technologies.

Government has taken measures towards paperless banking and digital payouts, she said.

Digitisation has entered the system layer by layer and physical presence is not required now, she noted.

Finance Minister Nirmala Sitharaman on Tuesday urged the financial technology or fintech industry to build trust and engage more with the government. Addressing the Global Fintech Fest 2022 (GFF) virtually, Sitharaman said that distances should be bridged and greater engagement should be ensured between regulators, industry and the government.

She said that distances bring distrust and therefore greater engagement with the government will help in discussions and exchange of ideas.

The Finance Minister added that the Prime Minister, Union ministers and government think-tank Niti Aayog are available all the time for consultations and discussions.

Sitharaman made these observations while responding to questions posed by Kris Gopalakrishnan, Chairman of Global Fintech Fest’s advisory board.

Finance Minister Nirmala Sitharaman underlined India’s expectations of getting enhanced lending from the International Finance Corporation (IFC) to the tune of $2-2.5 billion in the next one to two years and up to $3-3.5 billion in the next three to four years.

She raised these expectations during her meeting with IFC’s Managing Director Makhtar Diop, who called on her.

Diop discussed IFC’s lending footprint in India, especially in the areas of micro small and medium enterprises (MSMEs), infrastructure and climate management, the Finance Ministry said in a series of tweets.