Kotak Mahindra Bank Managing Director Uday Kotak on Friday said that Indian banks need to wake up before large parts of the traditional financial markets get away. He observed that Indian banks are behind the curve in tapping payments technology and slammed that Indian bankers have been short-sighted on the payments business in the last few years as they saw no money in payments. Kotak was addressing the Infinity Forum organised by the International Financial Services Centres Authority (IFSCA) and Bloomberg.
"Wake up, you will see large parts of the traditional financial markets move out," Kotak said. Bankers have allowed the growth of unified payments interface (UPI) payments which are monopolised by Google Pay and PhonePe. The two players have got 85 per cent market share, Kotak claimed.
"We have to keep in mind that consumer tech companies have revenue models outside of finance. For instance, the advertising model or the e-commerce model. Banks, by law, under Section 6 of the Banking Regulation Act cannot get into non-financial business as defined," he said.
Even while there is the issue of financial stability, there are serious issues on where one can draw the lines, he said. "I was reading an article which said that when you put a regulated entity into competition with a fintech or a consumer tech, the standard approach of the consumer tech is to play fast and loose on regulation and gain market share at great speed. I am not against competition. All that I'm saying is we need to make sure that in the name of better competitive service, we don't have a systemic and a stability challenge at the same time," he said.
Stressing on consumer trust in the process of digital growth, he said, "So, we need to make sure that as we go for fintech and grow it, we must also be clear that we do not betray trust."