The Securities Exchange Board of India (SEBI) is setting up an advisory committee to focus on financial technology (FinTech) and issues related to the industry. The aim is to make it easier for everyday citizens to turn their savings into investments in a heavily paper-reliant economy.
Revealed by SEBI chairman UK Sinha last week, the Fintech committee will explore ways and solutions to bring household savings into the financial market via technology.
Among the fastest and more robustly growing economies of the world, India’s population holds a significant portion of its earnings in savings accounts, interest bonds and other similar interest-based deposit offerings. The challenge is to turn the household individual into an investor in the capital market, according to Sinha.
In statements reported by Indian news daily The Hindu, Sinha was speaking at a Digital Summit conference in India’s capital, New Delhi.
With the economy doing well and a well-regulated market, the current numbers (for household savings invested in capital markets) are unacceptable. I feel that people are ready to invest, but issues related to convenience are holding them back, such as getting KYC done.
The committee will include regulators and officials alongside experts from the India’s burgeoning Fintech space. In January 2016, India crossed a billion mobile subscribers and reportedly exceeded the United States with 200 million smartphone users, becoming the world’s second largest smartphone market, second only to China. Home to arguably the world’s cheapest mobile tariffs, the country’s mobile revolution leaves room for massive opportunities in the Fintech space. The country has already survived a swim in the deep end, having gone through an unprecedented cash crunch in late 2016.
To harness technology to enable persons in small towns with small amounts to invest in a retirement fund, we are going to form an advisory committee on Fintech that will be led by some very strong business leaders from the industry.
Further, the Fintech advisory committee will also look at crowdfunding platforms, citing concerns toward having anonymous entities raising funds without any regulatory safeguards.
An early discussion paper issued by the SEBI proposed norms toward crowdfunding that were deemed “very restrictive” by tech startups, according to Sinha. Better norms that facilitate crowdfunding of genuine ventures are currently being discussed.
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