Niti Aayog suggests setting up of full-stack ‘digital banks’

A elaborate architecture and sequencing of betterment has been projected successful this paper, the intent of which is to undertake stakeholder consultations. Based connected the comments received, the insubstantial volition beryllium finalised and shared arsenic a argumentation proposal from Niti Aayog.

The authorities think-tank Niti Aayog connected Wednesday suggested mounting up of full-stack ‘digital banks’ to deepen entree to fiscal services successful the country.

In a treatment paper, Niti Aayog examines the planetary scenario, and based connected the same, recommends a caller conception of regulated entities — full-stack integer banks.
A elaborate architecture and sequencing of betterment has been projected successful this paper, the intent of which is to undertake stakeholder consultations. Based connected the comments received, the insubstantial volition beryllium finalised and shared arsenic a argumentation proposal from Niti Aayog.

Upon progression from the sandbox into the last stage, a full-stack integer concern slope volition beryllium required to bring successful `200 crore (equivalent to that required of the Small Finance bank). “Digital Banks” oregon DBs referred successful this Paper means Banks arsenic defined successful the Banking Regulation Act, 1949 (BR Act).

“In different words, these entities volition contented deposits, marque loans and connection the afloat suite of services that the BR Act empowers them to. As the sanction suggests however, DBs volition principally trust connected the net and different proximate channels22 to connection their services and not carnal branches,” the think-tank said successful the paper. However, arsenic a earthy corollary to being a “Bank” successful afloat consciousness of its ineligible definition, it is projected that DBs volition beryllium taxable to prudential and liquidity norms astatine par with the incumbent commercialized banks, it said.

Creating a caller licensing / regulatory model is being projected arsenic regulatory innovation and not arsenic regulatory arbitrage. “

Having said that, DBs connection a differentiated proposition and arsenic such, determination is scope for differentiated attraction successful adjacent areas of their cognition accordant with treating them identically with incumbent commercialized banks, successful the captious areas of prudential and liquidity risk, it added.