Under the Digital India initiative, the government has mandated an open API policy for five key programmes – Aadhaar, e-KYC (know your customer), e-Sign (a mechanism for digitally signing documents that is legally accepted), proposed privacy-protected data sharing, and the Unified Payments Interface or UPI. The emerging solutions could further the cause of financial inclusion and reduce complexities in transactions.
India FinTech Forum organised a Fintech Policy Roundtable as a part of Fintegrate Zone 2018 to discuss – What should be India’s Open API Policy to encourage fintech innovation on 1st March, 2018. This Fintech Policy Roundtable focused on the legal aspects and regulatory steps that are needed to promote open API policy in India.
Key recommendations to Policy Makers are:
- There should be a policy with respect to ownership of data, when Open API frameworks are utilized along with clear guidelines on data sharing.
- There is a need for governance mechanism for ensuring that the data is used for ethical purposes only.
- There should be a simpler mechanism for enabling SMEs and Corporates over Open APIs of Banks / NBFCs.
- Indian banking system offers limited set of Open APIs focused on Payments (UPI / IMPS). There is a need to provide APIs across deposit accounts (like account opening, account closure etc), loan accounts, trade finance etc.
- India should learn best practices from entities like Monetary Authority of Singapore (MAS) including for Sandbox creation. This Sandbox should be run by an independent entity without any bureaucratic challenges. There should be comprehensive enablement process including gating criteria, utilization criteria, sharing of data etc.
- There is a need for consortium of industries to come up with a unified API model, which may include retail sector, travel industry, manufacturing sector, insurance sector etc. This data along with banking data will be of great help in increasing digital push in the country. This can would further be enhanced through data from GSTN, MCA, Income Tax, EPF, NSE, BSE, CCI etc
- Enhancements to Consent Layer of Indiastack:
- Consent layer of Indiastack should be made ready for Fintech usage at the earliest.
- This layer should have framework for monetization, so that more entities join the platform as “data providers” beyond current set of government institutions. Similarly, data requesters should be able to pay for the data.
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