Technology is a powerful tool for building an inclusive, resilient and sustainable financial eco-system, FM Nirmala Sitharaman said.
MUMBAI, Sep 5 (The CONNECT) - Union Finance and Corporate Affairs Minister Nirmala Sitharaman today called for global cooperation and collaboration for creating a responsible financial eco-system.
Technology is a powerful tool for building an inclusive, resilient and sustainable financial eco-system, Nirmala said delivering the inaugural address at the three-day Global Fintech Fest, 2023 (GFF 2023).
She said that threats to global financial ecosystem, like physical border threats, cyber threats, crypto threats, drug menace, tax havens and round-tripping of resources and tax evasions need to be deliberated upon.
The Finance Minister said India’s G-20 Presidency has called for a framework for handling issues relating to crypto-assets. IMF and FSB have given their synthesis paper. India’s Presidency has also discussed and sought for global cooperation in matters of reforms in multilateral development banks, global debts distress, tax evasion and two pillar tax solution amongst other issues.
She said enhancing cross-border payments has been a priority of the G20 since 2020. One of the priority focus areas under the Indian G20 presidency is “Information sharing on national experiences and international initiatives on interoperability of national fast payment systems for seamless flow of funds”. This is expected to enhance cross border payments, she said.
Talking about making India’s financial ecosystem inclusive, Nirmala said in a span of 4 years, the number of Demat accounts has increased by 2.5 times, from 4.1 crore in 2019-20 to 10 crore in 2022-23.
A record number of Mutual Funds SIPs are being registered, which helps to generate long-term wealth, with the monthly flow in the mutual fund industry through the route reaching an all-me high of Rs 15,245 crore in July 2023.
The Assets Under Management (AUM) of the Indian mutual fund industry have increased tremendously in the last decade. It grew more than four-fold from Rs 10 lakh crore in May 2014 to a significant Rs 46.37 lakh crore (July 2023).
Top 30 cities of India are usually expected to be ahead in formal savings. However, in the last four years, the share of Cities beyond Top-30 cities in total mutual fund assets has grown from 15% to 26%.
Instruments like SIPs are only democratizing this wealth-creation opportunity. Just like UPI (Unified Payments Interface), democratized payments and now ONDC (Open Network for Digital Commerce) is poised to do for e-commerce.
She said Fin-techs are driving more inclusion and creating their niche. Today in lending, fintech have 36% share of new-to-credit customers vs 22% share in banks. In Payments, Fintech have 93% share of UPI transaction value vs 7% share in banks.
In WealthTechs, Fintech broking have 80% share of active broking clients vs 20% active in traditional broking.
ITR data released in August signals “Formalisation of the Indian Economy”. There is now wider access to benefits like credit facilities, and social security (pension, insurance, etc). Each tax bracket (Tax Slab) has seen a minimum Threefold increase in tax filings, some even achieving a nearly Four-fold surge.
National Payments Corporation of India (NPCI), Payments Council of India (PCI) and FinTech Convergence Council (FCC), is ‘Global Collaboration for a Responsible Financial Ecosystem’.