Image Courtesy: Economic Times
The central bank of India has issued a warning about the rising influence of technological behemoths in the country’s digital financial services and payment systems, which might jeopardise the country’s financial stability.
The Reserve Bank of India raised worries about ‘Big Techs’ in its semi-annual financial stability report, saying they have the potential to become dominant players in financial services, putting them at danger of becoming “too-big-to-fail.”
“Specifically, concerns have grown about a fair playing field with banks, operational risk, too-big-to-fail issues, challenges to antitrust regulations, cyber security, and data privacy,” the RBI said in a report released Thursday.
While the study does not name any businesses or nations, India has seen a surge of interest in recent years from deep-pocketed global technology organisations. Amazon.com Inc. and Alphabet Inc. are among the companies investing billions of dollars in establishing payments ecosystems, connecting retail networks of thousands of mom-and-pop businesses, providing insurance and mutual funds through their apps, and eroding banks’ digital market share.
As the epidemic pushed people to go online, digital payments have reached new heights, with Walmart-backed Phonepe and Google Pay capturing the lion’s share of the retail sector. The central bank’s worry comes at a time when the top internet companies in the United States are battling new restrictions imposed by Prime Minister Narendra Modi’s administration in February that they claim limit privacy and free expression.
Moreover, Officials have asked that Facebook Inc. and Twitter Inc. remove hundreds of postings this year, provide sensitive user information, and adhere to a regulatory system that may result in jail time for executives if they do not cooperate.