##lfs, there is a crying need for emergence of additional technical capabilities to undertake evaluation of projects, restructuring schemes, etc. banks will have to strengthen their in - house desks as well. reserve bank through the centre for advanced financial research and learning has taken initiative to organise capacity building program for bankers. number of members in a consortium 29. another suggestion that has come relates to limiting the number of banks and financial institutions that should be permitted in a consortium or even in a multiple banking arrangement. it is said that the banks with very meagre share neither have incentives nor inclination to independently assess the proposal and they typically and blindly go by one that has bigger share. even if the bank has in - house technical capabilities, with a small share its voice is not strong enough. therefore, the suggestion is to have a regulatory limit on the number of members in a consortium or multiple banking arrangements so that every member has at least 10 % of the exposure and therefore will have serious independent credit appraisal and credit monitoring. there are counter views about this suggestion, especially with regard to the freedom to be available for a bank or borrower to take the commercial decision on a loan. ready list of management and technical experts / specialists 30. yet another suggestion is to prepare a ready list of management and technical experts and specialists whose services can be availed by banks, financial institutions or the asset reconstruction companies whenever the jlfs decide to change the management under a cap. perhaps iba can prepare and update such a ready list. 31. view. all these suggestions need further exploration and discussion before we take a final issues faced by scs / rcs capital 32. there is no denying the fact that scs / rcs need capital and that too on continuing basis to be able to grow and be meaningful players in the sector while avenues of raising capital is limited. the networth of 15 arcs is only around ₹4000 crore whereas stressed assets in the system run into lakhs of crore. the industry being a capital intensive one, scs / rcs are struggling to raise capital. deep - pocket investors are interested in the bis central bankers ’ speeches business but cautious on account of slow pace of judicial and administrative environment. while there is limited appetite among the existing sponsors and shareholders, the limit of 50 percent on individual shareholding and the stipulation that the sponsor should not have any controlling interest in the scs / rcs ( as stipulated by the sarfaesi act ) are

but from other banks which leverage fintech better. regulation of fintech 9. as fintech is transforming the financial landscape, the nature of regulation has to adjust. the sheer diversity in the functions performed by fintech firms, necessitates a widening of the regulatory perimeter. the approach to regulation also needs to adapt to the type of entity being regulated. while similar activities should attract uniform regulation in most cases, such activity based regulation might be less effective than entity - based regulation when one is dealing with financial activities by bigtech firms. cybersecurity risks are likely to overshadow financial risks for all. systemic risks, operational risks and risks affecting competition are of prime importance when dealing with large financial market infrastructure entities or bigtech. countries need to overcome the legislative and regulatory deficits in dealing with concerns surrounding privacy, safety and monetisation of data. regulations pertaining to data issues needs to adapt to a world where boundaries between financial and non - financial firms is getting increasingly blurred or geographical boundaries are no longer a constraint. ( bis papers no 117 33 ) 10. it is virtually impossible for legislation to keep in step with the fast mutating fintech landscape. until legislation catches up, regulation has to adapt to ensure that the financial system absorbs digital innovation in a non - disruptive manner. regulation is sometimes defined as the process of slowing down change to give time for a system to adapt and evolve. the job of the regulator is not easy when a given financial service, performed by well - regulated financial firms, changes to include non - financial firms in a constantly reconfiguring financial value chain. similarly, there are frictions for a non - financial firm to get used to financial regulation. the social benefits of a new technology or its impact on customer needs to be well understood by all stakeholders – regulators, existing financial firms as well as innovating fintech entities. slowing down the process of change, which attracts the criticism of stifling innovation – is often the best way to ensure customer protection. 11. as digitisation is promoted by public policy, the industry is often characterized by the rise of dominating entities, whether bigtech or infrastructural entities. this raises competition and concentration risks. there is no clear answer to how such issues are to be resolved – limits on market share, for example, might open up the market to new players but it could also stifle incentives to innovators. regulators also need to improvise