A strategy for streamlining the Know-Your-Customer procedure using standard operating procedures, preventing the proliferation of unlicensed lending via internet applications, and increasing social enterprise funding via social stock markets. These were some of the subjects covered by senior representatives from the Financial Stability and Development Council and the Finance Ministry.
The Union Finance Minister Nirmala Sitharaman chaired the 28th meeting of the Financial Stability Dialogue (FSDC) on Wednesday in the nation’s capital. Members include Shaktikanta Das, the governor of the Reserve Bank of India, as well as top officials from the Finance Ministry and the chairs of regulatory authorities including SEBI, IRDA, PFRDA, and IBBI. According to a statement, the council also talked about how to carry out its decisions and the Union’s budget statements.
Government stability aims include boosting social enterprises
Officials reviewed strategies to stop the damage caused by illegal lending applications and stop their proliferation at the 28th Financial Stability and Development Council (FSDC) meeting, which was headed by Finance Minister Nirmala Sitharaman on Wednesday, according to the finance ministry.
The ministry also mentioned the topics of macro-financial stability, the readiness of India to address them, and the financing of social businesses via social stock markets. A social stock exchange is a fundraising tool for non-profits and social entrepreneurs that is added to an already-existing stock market.
The ministry said that they also talked about MicroFinancial stability concerns and how ready India is to handle them, as well as social business funding through social stock markets. In addition to an already-existing stock exchange, a social stock market is made for non-profits and social entrepreneurs who want to generate money. Many Indian residents have fallen victim to the illegal loan applications that have proliferated due to the quick increase in digital lending.
Online apps are being used by FSDC to combat illicit lending
To protect India’s banking industry from new threats, the Financial Stability and Development Council (FSDC) has decided to maintain a close eye and make concerted efforts.
The council has made the following decisions: to create a plan to streamline and digitize the financial industry’s Know Your Customer (KYC) procedure; to encourage social entrepreneurs to raise money via social stock markets; and to take additional steps to prevent the spread of unapproved lending via online applications.
However, under the direction of Union Finance Minister Nirmala Sitharaman, the council convened for its 28th meeting in New Delhi, urged for enhancing inter-regulatory cooperation in the financial sector to promote equitable economic growth. In light of the national and international MicroFinancial conditions, FSDC also advocated for increased watchfulness and proactive measures to identify new threats to financial stability.
The Financial Stability and Development Council (FSDC) in India has discussed strategies for implementing decisions made by the Union Budget and the Financial Services Council (FSDC). These include prescribing uniform KYC norms, inter-usability of KYC records, simplification and digitalization of the KYC process, and promoting fund-raising by social enterprises through social stock exchanges.
There are plans to digitalize KYC and stop illicit internet lending
The Finance Stability and Development Council (FSDC) resolved on Wednesday to develop a plan to streamline and digitize the KYC (Know Your Customer) procedure in the banking industry in the wake of the Paytm Payment Bank scandal. However, The FSDC is working on a strategic role to support GIFT IFSC in its envisioned role of facilitating foreign capital and financial services for the domestic economy.
The FSDC is also addressing issues related to implementing decisions and the Union Budget announcements, such as prescribing uniform KYC norms, inter-usability of KYC records, simplification and digitalization of the KYC process, and promoting fund-raising by social enterprises through social stock exchanges. The government has also addressed the harmful effects of unauthorized lending through online apps, as seen with Google’s suspension or removal of over 2,500 fraudulent loan apps.
The FSDC, under the leadership of RBI Governor Shaktikanta Das, is committed to maintaining cyber security preparedness and taking timely action to mitigate vulnerabilities in the Indian financial system. The FSDC members are also focusing on strengthening inter-regulatory coordination to develop the financial sector for inclusive economic growth. They are also addressing the activities of the FSDC Sub-Committee and their actions on previous decisions.
Comments 1