NITI Aayog Releases Report On Digital Banks

NITI Aayog Releases Report On Digital Banks:

NITI Aayog’s report makes a case and offers a template and roadmap for a licensing and regulatory regime for digital banks. It focuses on avoiding any regulatory or policy arbitrage and offers a level playing field to incumbents as well as competitors.

The report recommends a carefully calibrated approach, comprising the following steps –

  • Issue of a restricted digital bank licence (to a given applicant) (the license would be restricted in terms of volume/value of customers serviced and the like).
  • Enlistment (of the licensee) in a regulatory sandbox framework enacted by the Reserve Bank of India.
  • Issue of a ‘full-scale’ digital bank licence (contingent on satisfactory performance of the licensee in the regulatory sandbox, including salient, prudential and technological risk management).

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