Underscoring the growing role of fintech in the digital transformation of the economy, the minister reviewed innovations in prepaid instruments and digital tools supporting the delivery of welfare schemes, according to a series of posts on the social media platform ‘X’ by the minister’s office.
“We want every State to speed up on digitisation. We are also helping them in expediting it. While giving the 50-year interest-free loans to States for capital expenditure, we underline that we will incentivise States who get on to digitise their records at the earliest. So, we want digitisation to happen sooner and in every sector,” a tweet from the minister’s office quoted her as saying.
Innovative fintech solutions
During the visit, the minister also witnessed demonstrations by Pine Labs on innovative fintech solutions being developed around the account aggregator (AA) framework, a system that allows people to share their financial data across institutions. The minister’s visit to the fintech enterprise comes in the context of the massive adoption of digital payments across the economy, including among small businesses and retailers, giving a strong boost to the formalisation of the economy.
“Smt @nsitharaman visits the office of Pine Labs (@PineLabs), a digital Fintech company, in Noida. The Hon’ble FM interacted with the employees and staff there, acknowledging India’s Fintech firms’ contribution to expanding country’s Digital Public Infrastructure (DPI) and in enabling seamless, secure and inclusive financial services for merchants and MSMEs,” said another tweet. MSMEs refers to micro, small, and medium enterprises.
Sitharaman witnessed demonstrations of the fintech firm’s innovative solutions for prepaid instruments, the account aggregator framework, and digital services used in the Public Distribution System (PDS) and other government schemes and services.
Digitisation of payments and financial services
The government has been key in focusing on the digitisation of payments and financial services, and India has emerged as a hub of fintech solutions and innovations in the past few years, with several startups emerging in this space.
In a February report, EY noted that India has positioned itself as a competitive fintech hub globally with the highest fintech adoption rate. “When compared to its peers and other FinTech hubs like UK, US, China, and Singapore, India scores high in regulatory and government support, funding, technological preparedness and entrepreneurial spirit,” it said.
The report noted that the Indian fintech ecosystem continues to evolve and that there are challenges to address, including regulatory concerns, data security, and low financial literacy among users.
Indian fintech market
The EY report noted that the Indian fintech market is expected to expand by 30% to reach $180-200 billion by 2029, fuelled by rising income, awareness and digital infrastructure. “By transforming challenges into opportunities through innovation, India can leverage its FinTech potential to achieve its Viksit Bharat 2047 vision of becoming a developed nation,” it said.
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