Karnataka Digital Economy Mission’s (KDEM) Fintech Task Group has suggested the need for the formulation of the ‘Karnataka FinTech Policy’.
A report, which was presented to the Karnataka government at ‘Mangaluru Technovanza’ organised as part of the ‘Beyond Bengaluru’ initiative of KDEM on Saturday, has asked to commission and initiate action for the creation of a dedicated ‘FinTech’ policy for the State.
It said KDEM with the support of the FinTech Task Group shall anchor and draft the ‘FinTech Policy’.
It also said the State government may establish a dedicated regulatory help desk to offer services to fintech firms such as to understand the regulatory framework and how it applies to fintech companies and to prepare an easy-to-read rulebook consisting of various laws and regulations that fintech firms need to comply with.
Given the evolving nature of fintech services and products, the report said, there may be opportunities to generate value in an alternative regulatory environment. Considering this, the report suggested that the State government may anchor the formation and institutionalisation of a regulatory sandbox in collaboration with sector regulators such as RBI, SEBI, IRDAI, and PFRDA.
Wide range of suggestions
Other suggestions included the creation of the ‘Karnataka Centre of FinTech Excellence’ and the ‘Karnataka FinTech StartUp Innovation Corpus’. The recommendations also included areas of talent identification and training support, mentorship, and financial banking literacy.
The report stressed the need to make Karnataka a $500 billion fintech market by 2030.
Estimating the fintech market of India to be at $1 trillion by then, the KDEM report expected Karnataka to garner 50 per cent of this market. The report said that Karnataka should produce 50 fintech companies by 2030 to achieve this target.
The report said that the current size of the fintech market is at $50 billion in India and the country has over 6,600 fintech start-ups now.
Of the current fintech market here, Karnataka’s market share is estimated at $20 billion, contributing to over 40 per cent of the fintech start-ups in the country, it said.