The Reserve of Bank of India (RBI) has recognized Big Tech’s push towards financial services as a challenge for banks in the South Asian market. The Central Bank claimed that the increasing presence of these firms has prompted concerns about the creation of an uncertain market. An RBI report published in the last week of June mentioned that the Big Tech provides enormous digital services that have tremendous ability to support financial inclusion, in turn generating lasting efficiency gains and also making the banks become more competitive, but their expansion in the financial services sector has given an appraisal to the vital policy concerns. Especially around the banks, operational risks, challenges to anti-trust rules, big to fail issues, data privacy and cybersecurity.
The main aim for central banks and financial regulators is to achieve stability, which can be accomplished by having an activity-based approach and entity-based prudential regulation of Big Tech Companies. Additionally, on international fronts, cohesion in rules and standards is very vital. The RBI is now going to open the national payment network, the big tech giants including Google and Facebook have applied for licenses of it. The big tech firms are following the regulations set by RBI. The banks are to use the system formed by Central Bank and work in cohesion with the banks. RBI is also expected to make more regulations, like in wallet KYC restrictions and market share caps.
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