Fintech repository to be set up by April 2024, says Shaktikanta Das

• A repository will offer a consolidated platform for diverse data, negating the necessity for lenders to source information from multiple channels.
• Such a repository may also help in curbing fraudulent activities.
• RBI also announced that it will come up with guidelines to govern web aggregation of loan products.

The Reserve Bank of India (RBI) has proposed the establishment of a fintech repository. “This will be operationalised by the Reserve Bank Innovation Hub in April 2024 or earlier. FinTechs would be encouraged to provide relevant information voluntarily to this Repository,” said Governor Shaktikanta Das while announcing the Monetary Policy Committee decisions on Friday.

The RBI also announced that it will come up with detailed guidelines to govern web aggregation of loan products.

The fintech repository holds the potential for various improvements in the . Firstly, it promises enhanced access to fintech information, offering a consolidated platform for diverse data, negating the necessity for lenders to source information from multiple channels. This streamlining of processes not only reduces operational costs but also significantly augments efficiency within the fintech ecosystem.

Additionally, the repository's comprehensive compilation of an individual's fintech profile facilitates better credit risk assessment for lenders. By providing a holistic view of a borrower's financial health, it empowers lenders to make more informed credit decisions.

Consequently, this informed decision-making has the potential to reduce loan defaults, thus fostering a healthier credit environment overall.

“The proposed establishment of a repository by April signals a forward-looking approach, aiming to enhance the efficiency and transparency of financial systems on a macro scale,” says Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy, a trading platform.

Another benefit lies in the repository's ability to curb fraudulent activities. By enabling cross-institutional analysis of fintech data, it acts as a tool in identifying and preventing fraudulent transactions. This not only safeguards the interests of lenders but also bolsters trust and stability within the fintech system, benefitting both lenders and borrowers alike.

One of the key aims of the repository is to bring about greater financial inclusion, particularly for marginalised communities and businesses. By offering lenders a more accurate and comprehensive assessment of an individual or entity's financial standing, it lays the groundwork for increased accessibility to credit and other fintech services, potentially bridging the gap for those underserved in the fintech domain.

Lastly, the repository will provide the regulator with access to a vast dataset of financial information and will play a key role in improving regulatory oversight. Says Anand Agrawal, Co-Founder and Chief Product and Technology Officer , Credgenics, a debt collection platform, "The approach to encouraging voluntary contributions from fintechs will empower regulators with real-time insights and enable informed, agile, and risk-mitigating decision-making. This initiative is a crucial step in the RBI’s approach to streamlining the regulatory framework for fintechs.” With comprehensive insights, regulators can more effectively monitor the fintech system, identify potential risks, and implement proactive measures, contributing to a more robust, stable, and resilient fintech framework.