‘Most people feel financial products are products for the elite group’
The Reserve Bank of India is likely to consider linking lending rates to repo rate, said Tarun Ramadorai, chairman of a central-bank constituted committee on household finances, in an interview.Edited excerpts: It doesn’t matter if you are a new player or established player. One of the biggest impediments to creating new technology is the fact that there is a huge regulatory uncertainty. Hence we suggested having what is called a regulatory sandbox and this should be a cross-regulatory initiative and it should be a safe space in which financial technology firms can experiment with temporary relaxation of rules with the view towards gathering evidence. Through this process, financial technology firms will develop the technology in the right way. I think we are starting to see some changes. I think this repo rate linking plus immediate reset (of loans every month) plus immediate pass through is all going to happen. It’s all in the works. I think my committee report is going to be helpful in providing more evidence that this is going to be a useful thing and I hope we will be able to see this going forward. I’d like to see much more financialisation of savings. Second, what I definitely want to see is an increase in the rate of pension and insurance take off in the country. Third one is a switch away from money lenders and so on which has been a stubbornly persistent problem towards institutionalised credit. There I think you can’t ban informal credit but also have to improve the provision of formal credit.