Report praises RBI for financial inclusion

NEWDELHI: The Indian authorities are proactively establishing institutional checks to empower citizens rather than allowing big techs to control customer data for their own ends, the Bank for International Settlements (BIS) said in its latest report.

The report, however, said the Indian model does not necessarily transpose well to all jurisdictions. “Different countries may wish to adopt different models, in part due to different starting points. For instance, big tech firms have rapidly grown to dominate digital platforms in both China and the US, which might make mandated sharing of data at this point more difficult,” it said.

Established in 1930, BIS is a bank for central banks with a mission to serve them in their pursuit of financial stability. Headquartered in Switzerland’s Basel, it is owned by 60 central banks of various countries.

The report, “The design of digital financial infrastructure: lessons from India”, authored by Derryl D’silva, Zuzana Filková, Frank Packer and Siddharth Tiwari, praised the role of the Reserve Bank of India (RBI) – in rapid financial inclusion. India is an example of how various policy reforms related to digital finance, such as transformation of the traditional banking system with the regulator [RBI] playing a pivotal role can solve challenges of financial development and inclusion that once seemed out of reach, it said. “In addition to bringing the population into the formal financial system and keeping them there, the Indian authorities have also developed an architecture that allows individuals to access and share their personal data to overcome information asymmetries without compromising their privacy,” it said.

It said a large population in developing countries was unbanked despite progress on financial inclusion as about 1.7 billion individuals remain unbanked in India and China.