shaktikanta das : opportunities and challenges of fintech keynote address by mr shaktikanta das, governor of the reserve bank of india, at fintech conclave 2019, organized by niti aayog, new delhi, 25 march 2019. * * * i am extremely happy to participate in niti aayog ’ s fintech conclave 2019 and share my thoughts on the technological revolution that is shaping the future of finance. i am particularly thankful to shri amitabh kant, ceo of niti aayog for having invited me to such an august gathering. as i understand, this conclave is woven around the theme of indian fintech ecosystem as well as steps required to help achieve the potential that the sector offers towards growth, employment and inclusion. given the wide canvas that fintech encompasses, i have organised my thoughts on some of the core issues in this area. 2. in general, fintech stands for financial technology and describes technologically enabled financial innovations. from ‘ start - ups ’ to ‘ big - techs ’ to established financial institutions, all the key players are harnessing this technological edge along the financial services ’ value chain to provide agile, efficient and differentiated experiences to the end - user. this movement has the potential to fundamentally transform the financial - landscape where consumers will get to choose from a larger set of options at competitive prices and financial institutions could improve efficiency through lower operational costs. as a country that is determined to achieve universal financial inclusion at affordable costs, this is a defining moment for us, and we should seize the opportunity. fintech experience in india 3. india has been at the forefront of this revolution. a recent global survey ranks india second in terms of fintech adoption, with an adoption rate of 52 per cent 1. it is reported that there are as many as 1218 fintech firms operating in india which have created a large number of jobs. they are also generating a healthy appetite for investment. 4. the reserve bank has over the years encouraged greater use of electronic payments so as to achieve a “ less - cash ” society. the objective has been to provide a payment system that combines the attributes of safety, security, enhanced convenience and accessibility, leveraging technological solutions that enable faster processing. affordability, interoperability, and customer awareness and protection have also been other focus areas. banks have been the traditional gateway to payment services. however, with the fast pace of technological changes, this domain is no longer the monopoly of banks

. non - bank entities are cooperating as well as competing with banks, either as technology service providers to banks or by directly providing retail electronic payment services. the regulatory framework has also encouraged this enhanced participation of non - bank entities in the payments domain. 5. in recent years, a focussed effort has been made to develop a state of the art national payments infrastructure and technology platforms, be it immediate payments service ( imps ), unified payments interface ( upi ), bharat interface for money ( bhim ), bharat bill pay system ( bbps ), or aadhaar - enabled payment system ( aeps ). this has changed the retail payments scenario of the country. the total volume of retail electronic payments witnessed about nine - fold increase over the last five years. 6. let me now mention some numbers with regard to digital modes of payment. the neft system handled 195 crore transactions valued at around rs. 172 lakh crore in 2017 – 18 growing by 4. 9 times in terms of volume and 5. 9 times in terms in terms of value over the previous five years. similarly, the number of transactions carried out through credit and debit cards in 2017 – 18 was 141 crore and 334 crore, respectively. prepaid payment instruments ( ppis ) recorded a 1 / 4 bis central bankers'speeches volume of about 346 crore transactions, valued at rs. 1. 4 lakh crore. thus, the total card payments, in volume terms, stood at 52 percent of the total retail payments during the year 2017 – 18. 7. developments in the spheres of banking technology and trade finance have been commendable as well. alternative models of lending and capital raising are coming up and have the potential to change the market dynamics of traditional lenders and the role of traditional intermediaries. crowd - funding, which entails raising external finance from a large group of investors, is at a very nascent stage in india. the peer - to - peer ( p2p ) lending for which rbi has issued master direction in october 2017 has the potential to improve access to finance for small and medium enterprises. eleven entities have been licensed to operate p2p platform. the reserve bank has also granted licenses and permitted seven purely digital loan companies ( nbfcs ) to commence operations. although they are purely digital players operating through mobile applications, we have ensured that they have at least one physical presence for customers to reach out to in case of need. 8. furthermore,