ARTICLE

Digital Transformation: “Impact of Digital Payments

and Neo-Banks on Financial Inclusion in India and its
interplay with Data Protection and Cyber Security
Regulations”
Digital Payment and Neo Banks (online financial technology companies-fintech companies) are emerging
as the future of the banking system in India. The Government is promoting digital payments and neo banks
through various measures as these mediums can boost the financial inclusion tremendously resulting into
an enormous growth potential for the banking sector. FinTech is rapidly changing the face of the banking
industry, as several banks are now switching to digitization as well as paperless and cashless processes.
However, the regulatory system is not developed in India, thereby posing a hurdle for financial inclusion in
its entirety due to the lack of digital data protection. There is an emergent requirement for adequate data
protection and cyber security compliance as these fintech entities rely on digitally collected data; However,
the Indian legal system in relation to data protection and cyber security is yet to match pace with the growth
of technology in recent times. The purpose of this paper is to analyse the impact of digital payments and neo
banks on financial inclusion with a focus on concerns, laws and regulations regarding data protection and cyber
security and the Digital Workforce of the future.

fundraising, investment management, and much more.

Through specialized software and algorithms, FinTech helps
companies, business owners, and consumers manage their
financial operations and processes. FinTech has also come
to include the development and use of cryptocurrencies like
Bitcoin in today’s times. Although different sectors of FinTech
continue gaining traction today, a large part of FinTech still
focuses on the traditional global banking industry. And India
is at the forefront of this FinTech revolution. Due to the rapid
growth of use of smartphones in India, availing digital services
Suhita Mukhopadhyay, ACS has become the norm of our life. This has led to an enormous
Intellex Legaal Sollutions LLP growth of the fintech sector in India and at the same time
Ghaziabad promoted financial inclusion. India has witnessed 2.7 billion
dollars of Fintech investment last year.

T
INTRODUCTION Digital payment and neo banks also come within the
umbrella of fintech. Since the fintechs work online, there is
he Indian FinTech industry has been a low operational cost and a wider reach in comparison to
bristling with activity over the past few years. a traditional setup requiring brick-and-mortar infrastructure.
The gradual shift towards digitalisation in
India has fuelled the growth of financial Any financial system has few risks associated with it and so is
technologies (“fintechs”)1 that help to set the case with fintechs Cyber security is the biggest challenge
up a buoyant alternative credit mechanism. for Fintech businesses. The risk of information leakage,
The term FinTech was first coined in the malware, security break, cloud-based security risk, phishing,
21st century to describe the technology used in the back-end and identity threat is making the Fintech businesses helpless at
systems of established financial organizations. The winds of some point or others. For instance, digital payments generally
change in this industry are being driven by advancements involve three parties, i.e., source bank, payment system
in technologies like automation, data science, AI/ML, platform and customer, hence the customer shares significant
smartphones, and telecommunication which are ushering in a sensitive personal information with the other two parties
new era in of FinTech players who are on one hand usurping involved in the transaction, posing trust on the other two
business from traditional players while also collaborating with parties that not only the transaction is secured but also his/
them to expand the market in other areas. On the other hand, her personal data is safe with the other two participants. If
the pandemic while being transitorily disruptive, has provided any of the parties (other than the customer) fails to maintain
a fillip towards digitalization of financial services. Consumers adequate security in relation to the transaction concerned
are eager to adopt digital, contactless, and remote services. or the data shared with them, the customer may suffer
significant loss and damage. It may also be noted that since
Today, however, FinTech spans various sectors and there is a significant degree of online verification, there are a
industries, including education, retail banking, non-profit host of permissions and accesses granted by the customer

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 Digital Transformation: “Impact of Digital Payments and Neo-Banks on Financial Inclusion in India and its interplay with
Data Protection and Cyber Security Regulations”

ARTICLE
to these digital payment platforms, which interalia involve,
reading customer’s messages, using microphone and camera
of the customer, access their photo gallery etc. As the online
mechanism has associated potential cyber security and data
protection risks, there are a host of regulations and guidelines
to ensure that the cyber security and data protection issues
are taken care of while interacting with such digital platforms.

DIGITAL LENDING AND NEO BANKS

India’s digital lending market has grown tremendously in the
past few years to serve the large financing gap across retail
and MSME, particularly for thin file customers. Digital lenders
leveraging alternate data, automation, and cost advantages
have been able to make forays into these segments and
have helped the underserved get access to credit. Much of
this growth has come about through new innovative lending
models. The Indian digital lending landscape is replete
with innovative FinTech products that cater to a particular
subsegment of customers or provide a new method of
distribution, underwriting, or servicing. In India, the current regulatory landscape allows only a
partnership route for Neo banking startups. Notably, some
The Government of India has been taking several measures banks such as ICICI, RBL, Equitas and IDFC first have built
to promote and encourage digital payments in the country. API stacks to capitalize on this partnership opportunity. There
As part of the ‘Digital India’ campaign, the government aims are around a dozen neo-banks in India including Razorpay X,
to create a ‘digitally empowered’ economy that is ‘Faceless, EpiFi, Open, NiYo, Jupiter among others.
Paperless, Cashless’. There are various types and modes
of digital payments. Some of these include the use of debit/ The Neo banking players established in India or in the process
credit cards, internet banking, mobile wallets, digital payment of establishing can be grouped in two major categories based
apps, Unified Payments Interface (UPI) service, Unstructured on their target segments:
Supplementary Service Data (USSD), Bank prepaid
cards, mobile banking, etc. The RBI Ombudsman Scheme  Targeting retail customers. These Indian Neo banks
for Digital Payments defines a digital transaction as a payment usually focus on:
transaction in a seamless system effected without the need
for cash at least in one of the two legs, if not in both. This  Products for underserved or ‘New to Banking’(NTB)
includes transactions made through digital/electronic modes segment
wherein both the originator and the beneficiary use digital/
electronic medium to send or receive money.  Providing better and differentiated experience to
customers who are already banked
Neo banks are types of digital bank except that in neo banks
the entity is exclusively an online entity. Neo-banks are  Targeting MSME and gig-economy segments
online-only financial technology (fintech) companies that
operate solely digitally or via mobile apps. Simply put, neo- Common themes of product offerings in underserved retail
banks are digital banks without any physical branches. Neo customer segments focus on financial inclusion and final
banks may also have their specific target customer base. The literacy. These offerings typically attract blue-collar workers
global neo-banking market size is expected to reach $333.4 or millennials and Gen-Z segments, offering them personal
billion by 2026, rising at a compounded annual growth rate finance management services, digitally rich retail banking
(CAGR) of 47.1 per cent. that includes unique debit and credit card offerings, and
insurance services. Standard offerings for MSME segments
Globally, there are three Neo banking models: include features to collect recurring payments, book-keeping,
tax, supply chain management, and credits. These MSME-
 Neo banks that have full or restricted virtual banking focused players have the opportunity to use the cash flow
licenses that regulate and enables them data for alternative lending.
 Digital-only direct offerings of traditional banks to counter
emerging virtual banks and tap into digital adoption Thus, it can be concluded that both, neo
banks and digital payments, operate digitally and make the
 Neo banks that do not have virtual -banking or e-money most use of internet access and electronic medium such as
license and operate in partnership with traditional banks in laptops, tablets and smartphones which are at the disposal
the country of over 500 million internet users. Digital lending provides an
opportunity to this significant population to access credit in
NEO BANK LANDSCAPE IN INDIA an affordable manner. Industry leaders say the strong growth
in digital lending indicates the huge untapped credit potential
Although neo-banks are relatively new concept in India, the in India which can be bridged efficiently through the use of
concept has been gaining traction over the last few years. technology.

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Data Protection and Cyber Security Regulations”
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(25.5 billion real-time payment transactions were has led to the rise of reluctance on the part of the banks to
processed in the country, followed by 15.7 billion in China lend. Digital lending has acted as a saviour for the borrowers,
and 6 billion in South Korea. By 2025, digital payments satisfying their liquidity requirements. Thus, the popularity of
in India would collectively account for 71.7 percent of the so-called ‘niche’ neo banks has increased significantly
overall payments volume, leaving cash and cheques at during the COVID-19 pandemic. The virtual, branchless
just 28.3 percent.) nature of the neo banks at the time of lockdown and social
distancing imposed by the government to tackle the medical
GOVERNMENT ENHANCING DIGITAL exigency on account of the pandemic has also added to its
wide-scale acceptance.
LENDING IN INDIA TO PROMOTE
FINANCIAL INCLUSION COVID catalysed the digital transformation of various
industries and FinTech’s are amongst the many business
“By making financial services accessible at affordable costs models that flourished during the pandemic. During the
to all individuals and businesses, irrespective of net worth and lockdown, ‘Instamojo’, a payment gateway application,
size, financial inclusion strives to address and offer solutions introduced ‘InstaCash’ - a short term loan facility.27 InstaCash
to the constraints that exclude people from participating in the enables merchants to avail loans for an amount upto INR 1 lakh
financial sector. Research shows that countries with deeper for a time period of either 7 or 14 days. Post demonetization,
levels of financial inclusion – defined as access to affordable, the number of Fintech businesses in India has substantially
appropriate financial services – have stronger GDP growth increased. There is no denying that Fintech is forming the
rates and lower income inequality.” future of next-generation financial solutions, and despite the
way that there are a few obstacles that Fintech companies are
The government and regulators are one of the key catalysts coming across in the current business landscape, they have
for the growth of the FinTech sector in India. Few of the certainly a thriving future in India. COVID-19 has provided
government programs that have played a key role in propping a tailwind to digital adoption in financial services, and it is
up FinTech are; Jan Dhan Yojana, Startup India, license unlikely that the newly earned digital user base will roll back
for payments banks, Digital India program, recognition of after the pandemic situation is completely resolved.
P2P lenders as NBFCs, regulatory sandboxes by RBI, and
IRDAI for FinTechs, and National Common Mobility Card However, digital payments and neo banks have their
(NCMC). The robust public digital infrastructure (Aadhar, constraints of appeasing to the masses which have inherent
UPI, account aggregation, GST, OCEN etc.) and related dilemmas with respect to the privacy and cyber security
supportive regulatory environment has helped power India’s aspect of digital payments and neo banks. The customer
FinTech innovations. This has been furthered by the Unified shares a significant amount of his/her sensitive personal
Payments Interface (UPI) which has witnessed extraordinary information with the other two parties in the digital payment
adoption. UPI recorded over 4.2 billion transactions worth medium, namely, the source bank and the payment system
over ₹ 7.7 trillion in just October 2021. The platform approach platform. While entrusting the data, the customer expects
taken by the government in conceptualizing UPI has resulted that both, the transaction, and his/her personal data will be
in valuable payments products being developed on top of it, safe with the other two parties, failure of which can lead to
as a result of which payments can be made with the click of significant loss and damage to be suffered by the customer.
a mobile phone. This online mechanism has potential cyber security and data
protection risks associated with it. Security and privacy
A “whole of India approach” towards financial inclusion implications need to be adequately considered to ensure that
has also resulted in Direct Benefit Transfer (DBT) through the data is protected from cyber-crimes. Therefore, there are
apps such as PM-KISAN and extending micro-credit facility a host of regulations and guidelines to ensure that the cyber
to street vendors through PM-SVANIDHI apps. Use of security and data protection issues are taken care of during
advanced technologies and initiatives by the digital medium the interactions with these digital platforms.
is gradually resulting in availability of financial services to the
bottom of the pyramid segment, at the grass-root levels in
India. This sector of population was earlier largely devoid of KEY REGULATIONS AND REGULATORY
basic credit and other financial services. This is the reason APPROACHES GOVERNING DIGITAL
why financial inclusion through digitalisation has also been PAYMENTS AND NEO BANKS IN INDIA
an important part of Government of India’s pro-growth policy.

Regulators (RBI, IRDAI, and SEBI) have undertaken There is a lack of a consolidated set of guidelines
numerous measures to ensure increased accountability and on digital payments and neo banks. On the digital lending
the uninterrupted availability of secure and affordable digital side, the Reserve Bank of India (RBI) has indicated
financial systems. Indeed, financial inclusion has become a a recent policy move towards increased regulation. A
viable reality for the citizens of India. summary of laws, regulations, and guidelines applicable
to digital payments and neo banks are provided below:
COVID CRISIS HAS PROMOTED NEO  The Payment and Settlement Systems Act, 2007
BANKS AND DIGITAL PAYMENTS (“PSSA”). It is the principal legislation governing payment
systems in India.
Shocks of various kinds can drive technological adoption in
unanticipated ways. The COVID-19 pandemic has had an  The NPI Guidelines on Unified Payment Interface (“UPI”)
economic ripple effect across various sectors including the which enumerate the procedural guidelines to be followed
traditional banking system. This unprecedented situation by UPI platforms.

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 Notifications, circulars, and directions in relation to Non-
Banking Financial Companies (“NBFCs”) by Reserve
Bank of India (“RBI”) (applicable in case a digital platform
comes within the category of NBFC, as defined in the RBI The government and regulators are one of the
Act, 1934).
key catalysts for the growth of the FinTech
 The Guidelines on Regulation of Payment sector in India. Few of the government
Aggregators and Payment Gateways dated 17 March programs that have played a key role in
2020, issued by RBI, apply to the payment intermediaries,
namely the payment aggregators and payment gateways. propping up FinTech are; Jan Dhan Yojana,
Startup India, license for payments banks,
 The RBI’s Master Direction on KYC provides guidelines
on the KYC of customers during risk assessment to tackle Digital India program, recognition of P2P
cyber security issues. lenders as NBFCs, regulatory sandboxes by
 The Data privacy and Protection Laws including the Infor-
RBI, and IRDAI for FinTechs, and National
mation Technology Act, 2000 and the Technology (Rea- Common Mobility Card (NCMC). The robust
sonable Security Practices and Procedures and Sensi- public digital infrastructure (Aadhar, UPI,
tive Personal Data or Information) Rules, 2011. account aggregation, GST, OCEN etc.) and
 Besides the aforesaid, the Personal Data Protection Bill, related supportive regulatory environment
2019 (“PDP Bill”) is pending before the Parliament of has helped power India’s FinTech
India. The PDP Bill is modelled along the General Data
Protection Regulation (“Gdpr”) and is inspired by its key innovations.
principles like purpose limitation, data storage restriction
amongst others.
In January 2021, the RBI constituted a Working Group
the Information Technology (Reasonable Security Practices
to review digital lending activities by regulated as well as
and Procedures and Sensitive Personal Data or Information)
unregulated entities with the objective of forming a regulatory
Rules, 2011 (“Rules”) which define SPDI in depth, apply to
framework for digital lending. Following the submission of
body corporates or persons located within India and relate
the Working Group’s recommendations to the RBI, it is likely
to information about natural persons. A bank collecting SPDI
that the digital lending sector will see greater regulation.
has to abide by the Rules for collection, storage and disposal
In order to combat the above failings, RBI must consider
of data. In case a wrongful loss or wrongful gain to any
direct regulatory overseeing of nascent sector. In 2019, it
person is caused by the negligence on the part of a body
had introduced a new regulatory sandbox for testing new
corporate in possessing, dealing, or handling his/her SDPI
financial technologies. Similar regulatory sandbox should
then such body corporate shall be liable to pay damages by
be introduced for neo-banks considering their potential to
way of compensation to the person affected. As per S. 72A
accelerate financial inclusion of the masses.
of the IT Act, in case any person including an intermediary,
while providing services under a lawful contract, accesses
DATA PROTECTION AND CYBER SECURITY any personal information of a person with an intent to cause
FOR ADDRESSING PRIVACY CONCERNS wrongful gain or wrongful loss, and discloses such information
to any other person without the person’s consent or in breach
The Constitution of India does not list the right to privacy of the lawful contract, then the penalty imposed shall be of
as a fundamental right. However, this right is granted to the imprisonment up to a term of three years and/or fine which
citizens of India basis the interpretation taken by the Indian may extend to INR 5 lakh.
Supreme Court in 2017 in the landmark judgment of Justice
K. S. Puttaswamy (Retd.) and Anr. v. Union of India And However, one had to acknowledge that the
Ors. Herein, the Hon’ble Supreme Court primarily interpreted Amendment and Rules came into force in the years
Article 21 of the Constitution viz. the fundamental right to life 2009 and 2011 respectively. The punishments as per the
of Indian citizens as being inclusive of the right to privacy Amendment are trivial in comparison to the potential harm
and inter-alia, the right to protection of citizens data and that can be caused. Thus, they are not adept enough to
informational privacy. The PDP Bill was tabled in the Indian take into consideration the newest cyber security issues
Parliament by the Ministry of Electronics and Information concerning neo banks.
Technology (“Ministry”) on December 11, 2019. On 16
December 2021, the Joint Parliamentary Committee has Also, the Amendment does not provide for any framework
published its report along with the finalised Data Protection for data localisation, consequently, the Amendment does not
Bill, 2021. When passed into law, this has the potential make it mandatory for hosting the servers of big data collecting
to change the way in which data is used by businesses. companies like Facebook and Google, locally within India. This
India does not presently have an omnibus data protection leads to a scenario, where suing these big players becomes an
legislation. impossible dream with merely their marketing subsidiaries
within the geographical boundaries of India. This free flow of
In the meanwhile, the Information Technology Act, 2000 (“IT data outside the country without the person’s consent makes
Act”) was amended to include S. 43A and S. 72A to protect the entire mechanism to safeguard personal data, futile. To
personal data and sensitive personal data and information tackle this issue, the PDP Bill was introduced to ensure better
(“Spdi”). On 11 April 2011, the Government brought into effect data protection. One of the stipulations under the PDP Bill

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 Digital Transformation: “Impact of Digital Payments and Neo-Banks on Financial Inclusion in India and its interplay with
Data Protection and Cyber Security Regulations”
ARTICLE
is that SPDI can be transferred outside India provided such
data shall continue to be stored in India. Also, as per the
PDP Bill, SPDI can be transferred abroad only for processing
after obtaining explicit consent from the data principal (the
natural person to whom the personal data relates to). At the
same time, SPDI can be transferred abroad only if the other
jurisdiction has a secured infrastructure to provide adequate
protection. This will ensure that there is a positive change in
the current scenario of data protection thereby strengthening
the mechanism.

Since the PDP Bill classifies all forms of personal financial

data as “sensitive personal data”, neo banks should be
categorised as “data fiduciaries” (the entity that controls
the storage of the data and defines the permitted ways it
can be processed). PDP Bill prescribes various obligations third parties too. The information about the parties involved
for data fiduciaries (including social media intermediaries) should be explained to the customers by the lender. Lenders
on how they shall obtain, deal/process and retain personal should also ensure that the data stored is erased after use,
data. It makes them accountable for the compliance of the anonymised, and also made compliant with the law. These
obligations in respect of the processing of personal data can be difficult due to the enormity of data because there
undertaken by it or on its behalf. Personal data shall also has to be notices provided to customers and reviewing of the
be collected only to the extent necessary for the purpose of activities of the fiduciaries themselves to ensure compliance
processing. Further, there are stringent penalties prescribed with privacy laws. However, since the law requires the
for processing or transferring data in violation of the PDP Bill. same and until an alternate form of processing is provided,
The maximum financial penalty for a violation under the PDP obtaining proper consent is required to ensure compliance.
Bill has been capped at INR 15 crore. Also, processing of These factors should be kept in mind by the digital payment
de-identified personal data/re-identification without consent is platforms and neo banks to ensure compliance.
punishable with imprisonment of up to three (3) years, or fine
or both by the Data Protection Authority (DPA). The PDP Bill REGULATORY OVERLAP
seeks to establish an appellate tribunal to adjudicate the first
appeals against the DPA’s decision, and the second appeal The creation of a new Data Protection Authority (DPA) under
can be filed before the Supreme Court of India. the Bill, with extravagant powers and the imposition of blanket
provisions without adequate consideration of its impact on
The latest compliances for data protection in India are the financial sector, may lead to a regulatory overlap with the
imposed under the Information Technology (Intermediary existing bodies that supervise financial entities in the country
Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT currently, including the RBI, SEBI, IRDAI, etc. Such regulated
Rules, 2021”) notified on February 25, 2021. The IT Rules, entities are required by these sectoral regulators to collect
2021 primarily prohibit and regulate digital media and content certain personal data as part of their KYC processes and to
on the internet, and the role of intermediaries, including social prevent money laundering or tax evasion.
media intermediaries, in keeping the personal data of their
users safe online. Such personal data is mandatorily required to be collected
under law, so the protections of notice, consent, etc. are
PROSPECTIVE APPLICATION OF THE implied or meaningless for such processing. Further, since
such data is required to be retained so long as the customer
PDP BILL relationship exists and for a certain period thereafter under
the PMLA Rules, Banking Companies (PPR) Rules, SEBI
The PDP Bill cannot be applied retrospectively. If the Bill (LODR) Regulations, KYC norms, IRDAI Guidelines issued by
is made applicable to the processing of personal data various sectoral regulators, and hence, there is no question
retrospectively, the financial services sector at large would be of erasure of such personal data.
affected extensively. This is owing to the fact that the explicit
requirement of ‘consent’ would not be fulfilled in entirety
for obligations fulfilled in the past. In consideration of the WORK ECOSYSTEM BEING RESHAPED
above, the applicability of the PDP Bill to ongoing processing BY DIGITAL TRANSFORMATION
activities shall essentially include all retained data of the data
principals, since ‘storage of data’ is a subset of processing and Both organisations and “Today’s professionals” have redoubled
banks are under an obligation to retain such data in light of the their efforts to match strides with today’s increasingly digital
RBI regulations and other applicable laws. This may lead to a and remote job market. More than 9 in 10 companies
consent fatigue on the part of the customers since continuous in India are merging roles and looking to fill open roles
and ad-hoc express consents may be required to be obtained internally.
from the customers following potential renegotiations of all
concluded and effective contracts. Technology has reduced the costs of, and need for, much of the
traditional backoffice infrastructure, from paper processing to
However, there should be efforts by the data fiduciary to data centres. Process automation and upgrades to software
ensure that data collection, storage and usage henceforth and IT systems are causing a restructuring of financial
are complaint with the PDP Bill. Lenders often share institutions and a reduction of full-time employees. Middle-
customers’ personal data with credit bureaus and other office functions such as reconciliations are increasingly

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 Digital Transformation: “Impact of Digital Payments and Neo-Banks on Financial Inclusion in India and its interplay with
Data Protection and Cyber Security Regulations”

ARTICLE
The Information Technology Act, 2000 despite providing
some degree of data protection does not live up to varied
kinds of cyber breaches that can take place in the latest
The creation of a new Data Protection times. It is crucial that the PDP Bill is also modified taking into
consideration all the loopholes and thereby passed into an act
Authority (DPA) under the Bill, with soon so that its authority is established firmly. It is also essential
extravagant powers and the imposition that a specific set of laws on digital payments and neo banks
of blanket provisions without adequate exists to ensure that they have a clear and concise checklist.
This shall ensure that these entities deliver their functions but
consideration of its impact on the financial at the same time do not compromise on privacy.
sector, may lead to a regulatory overlap with
the existing bodies that supervise financial It is essential that the data protection and cyber security
laws in India develop in their entirety. Currently, there lacks
entities in the country currently, including a consolidated set of guidelines to adhere to. Despite
the RBI, SEBI, IRDAI, etc. Such regulated the hindrances, such as the lack of virtual licenses to neo
entities are required by these sectoral banks in India, digital payments and neo banks have grown
steadily in India. Indian regulatory regime does not allow
regulators to collect certain personal data as for the granting of virtual banking licenses. RBI, through
part of their KYC processes and to prevent its 2015 Master Circular on “Mobile Banking Transactions
money laundering or tax evasion. in India – Operative Guidelines for Banks”, has mandated
the requirement for digital banking service providers to
have some physical presence. As a result, neo-banks can
provide banking related services only through outsourcing
their banking responsibilities to licensed banking institutions
unnecessary. Entire processes, and many of the skills that and non-banking financial companies. In many cases, such
previously had to be hired, can be replaced with automation banks and fintech companies are structured as an outsourcing
or expert systems. This has also given room for third parties arrangement where the non-banks verify data for credit
to step in, such as cloud service providers. Digital identity (ID) requests or undertake the preliminary work for opening current
and know your customer (KYC) registries are implemented accounts. This arrangement shall be governed by the 2006
and can help redefine the onboarding and authentication RBI Guidelines on “Managing Risks and Code of Conduct in
process that has long required in-person verification at Outsourcing of Financial Services by banks” as well as the
a branch. A majority of industries have increased their 2010 RBI Guidelines on “Financial Inclusion by Extension of
proportion of digital talent out of the total amount of talent Banking Services – Use of Business Correspondents (BCs)”.
they hire. This signifies a greater emphasis being placed on It is imperative that the RBI facilitates neo banks to operate
equipping the workforce with digital skills. The reality of the within the ecosystem of virtual licensing.
skills gap means organisations are looking for talent with
a hybrid set of complementary skills. A hybrid skill set also To ensure that the digital payment and neo banks grow
indicates to an employer that this kind of talent will be open exponentially in the future, it shall be essential that they bank
to learning, reskilling, and upskilling as per the constantly on secure technology platforms by adhering to a consolidated
changing directions of the business. set of laws provided by the government.

CONCLUSION REFERENCE:
Experts estimate that the total market growth potential 1. The evolution of Neo Banks in India-Impact on the
for India’s digital lending sector between 2021-2023 is financial ecosystem
approximately USD 820 billion Therefore, to capitalize on this
2. Digital Banks : A proposal for Licensing & Regulatory
potential, many investors have infused a lot of capital into
Regime for India - Discussion Paper of Niti Aayog
digital lending businesses.
3. The Winds of Change -Trends Shaping India’s Fintech
Several key drivers that have contributed to this growth Sector
include the following:
4. Ernst & Young LLP
 Improved mobile and internet penetration
5. Reserve Bank of India, ‘Guidelines on “Financial Inclusion
 Regulatory and government policy push towards financial by Extension of Banking Services -Use of Business
inclusion Correspondents (BCs)’ (2010) https://rbidocs.rbi.org.in/
rdocs/notification/PDFs/CPC28092010.pdf.
 Emergence of low-cost real-time payment methods
6. A Wider Circle – Digital Lending and the changing
 Rising tech-savvy millennial population Landscape of Financial Inclusion – Price Waters Coopers
(PWC)
 A vocal FinTech community that is driving the innovation
agenda 7. Fintechs are paving path for greater financial inclusion in
India: https://www.financialexpress.com/industry/banking-
 COVID-19 induced need for contactless means of finance/fintechs-are-paving-path-for-greater-financial-
payments inclusion-in-india/2327874/ CS

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