The Governor of the Reserve Bank of India (RBI), Sanjay Malhotra, encouraged fintech startups in India to focus on financial inclusion and develop solutions that can serve the unbanked segment of the population. During the Global Fintech Fest, Malhotra observed that it was not possible to restrict innovation to favor rich customers. He promoted innovations to ensure that underserved and unbanked citizens would not be excluded from the financial system.
According to Malhotra, reaching high-income clients can be considered a temporary measure that produces immediate returns. Nonetheless, in the long term, the development of inclusive systems will make a difference. He urged them to offer low-cost, scalable solutions to individuals who are already not covered by formal financial services.
The RBI Governor has urged fintech companies to design consumer-friendly and easy-to-use financial products to serve categories of people such as the elderly, those with limited digital expertise, and individuals with disabilities. He also emphasized the importance of these products being secure, transparent, and compliant with regulatory standards to safeguard users.
Malhotra expects the pillars of sustainable fintech development to include trust and transparency. He challenged businesses to integrate information security systems into their products and services, thereby instilling consumer confidence and compliance with financial regulations. In this way, startups can help India achieve its objective of inclusive and responsible financial innovation.
The fintech industry in India is still advancing at a fast pace and has over 10,000 companies within the country. Malhotra states that the sector has received over $40 billion in investments over the past decade. This increase is a sign of high investor confidence and the country's digitalization.
Nonetheless, the Governor encouraged startups to seize this opportunity to reach the earlier untapped segments of society. He stated that the concept of inclusive innovation should always be at the forefront of fintech development ensuring that financial technology benefits all segments of the population, not just those with higher purchasing power.
Malhotra's statements support the idea that the RBI continues to endorse inclusive economic growth through digital finance, highlighting the central bank's commitment to building a reliable and fair financial ecosystem.