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NITI Aayog calls for strengthening payment infrastructure

NITI Aayog has called for strengthening the payment infrastructure to promote a level playing field for NBFCs and banks while suggesting diversification of credit sources to enable growth opportunities for MSMEs.

“NBFCs can be enabled to participate more freely in the payment ecosystem through specific measures, such as issuance of credit cards and allowing for OTP based mandates, e-KYC and other services to be provided similar to banks,” it said in a report titled ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat’ and jointly released with Mastercard.

Calling for a need to adopt aggregator-based models around challenges such as providing credit, lending, to help India move to an open banking/finance ecosystem, the report has suggested permitting a regulatory sandbox model on aggregator platforms in the credit and lending space tested in a pilot mode.

“There is a need to build information sharing systems, including a ‘fraud repository’, and ensuring that online digital commerce platforms carry warnings to alert consumers to the risk of frauds,” it suggested. NITI Aayog’s vice chairman Rajiv Kumar, CEO Amitabh Kant and Ravi Aurora, senior vice president and group head, global community relations, Mastercard were present at the virtual launch of the Report on Monday.

The report has further suggested digitizing registration and compliance processes. “Enabling agricultural NBFCs to access low-cost capital and deploying a ‘phygital’ (physical + digital) model for achieving better long-term digital outcomes is also needed,” it said adding digitizing land records will also provide a major boost to the sector.

Commenting on the urban transport, the report has recommended leveraging existing smartphones and contactless cards while aiming for an inclusive, interoperable, and fully open transport system such as that of the London ‘Tube’ to make city transit seamlessly accessible to all with minimal crowding and queues.

Based on five roundtable discussions held in October and November 2020, the report highlights key issues and opportunities, with inferences and recommendations on policy and capacity building across agriculture, small business (MSMEs), urban mobility and cyber security.

“India is seeing an increasing digitization of financial services, with consumers shifting from cash to cards, wallets, apps, and UPI. This report looks at some key sectors and areas that need digital disruptions to bring financial services to everyone,” NITI Aayog vice chairman Rajiv Kumar said.

“The Covid-19 pandemic has alerted us all to the fragility of cash and the resilience of digital technologies, including digital payments,” Ari Sarker, co-president, Asia Pacific, Mastercard said.

“With this report, we hope to highlight key elements of a roadmap India can follow to achieve the next level of digital transformation, driven by providing real value to the next half-billion of society that will go online and onto digital transactions in the next three years,” he added.

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