Reserve Bank of India (RBI) deputy governor T Rabi Sankar pulled up banks for ceding the Unified Payment Interface (UPI) space to an quantity where most of the enterprise is with non-banks.
He warned banks that disruption in a small region of banks’ enterprise can be speedy scaled up to disrupt other parts of their enterprise by the competitors.
“How is it that a device of transactions among two financial institution debts has developed in a way in which maximum of the commercial enterprise is owned via non-banks? Clearly, banks have overlooked a step right here,” Sankar said, even as addressing bankers at the 18th Banking Technology Conference organized with the aid of the Indian Banks’ Association in Mumbai on Saturday.
Sankar’s remarks come a day after the National Payments Corporation of India was compelled to extend the closing date for a rule, which sought to restriction the marketplace share of 0.33-celebration application carriers in UPI to 30%. This became after other gamers failed to scale up, and Phone Pe and Google Pay persevered to dominate the gap.
Sankar said banks already have the customer’s account variety and registered mobile range, and it’s far a easy step for them to provide UPI handles to their clients.
“Probably, the feeling is that small fee transactions are an insignificant enterprise to put your assets into. What you missed is that once a innovative era comes up, it affects best a small a part of the business. Scaling that up and improvizing on that to have an effect on the relaxation of the enterprise is only a small step away,” he counseled.
Sankar stated it’s miles a false impression to view fintech entities as a likely alternative for banks.
He stated any entity that took deposits, extended loans, and enabled bills is a financial institution, and handiest banks can create money. “The opposition is among digital techniques and conventional strategies of sporting banking services,” he said.
Sankar said even as banks are there to live, banking is mutating fast. He stated even as the RBI is against non-public currencies, they’ve proven that digitizing forex could have a few blessings, that is why the RBI moved beforehand with the crucial bank virtual foreign money (eRupee).
He said the initial revel in in phrases of digital currency structures is quite comfortable however the use instances must be developed thru personal innovation.