The Indian apex bank is reportedly assessing the recent alliance between Google Pay and Equitas Small Finance Bank on digital fixed deposits (FDs).
The Reserve of India (RBI) is looking into the impact of large technology firms foraying into the country’s fintech sector, reported the Business Standard.
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Last week, Equitas Small Finance Bank launched digital FDs on digital wallet platform Google Pay.
The new service will enable Google Pay users to book FDs on the app without opening a bank account.
According to the report, the sudden foray of Google into the deposits scene has irked the central bank.
At the same time, it was stressed that the deal was executed within established rules.
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By GlobalDataHowever, the central bank has been typically wary of leeway given to tech giants such as Google, Facebook, Amazon, Apple as well as Microsoft in the financial space.
One of the causes for concerns include Google Pay using its dominant position as a UPI provider to make the apps of banks themselves futile.
The central bank also has concerns on other tech giants setting foot in the sector, following in the footsteps of Google.
On its part, Equitas, its technology provider Setu, and Google have stressed that Google Pay will only serve as a distribution channel and will not get no commision for new FDs, or have any say in the FDs’ operations.
The KYC will also be completely managed by the bank.
“As Google Pay, our role is firmly circumscribed to providing these merchants a surface where Google Pay users can discover and gain from these offerings — be it credit products, insurance or any other,” Google APAC payments and new business unit business head Sajith Sivanandan said in a blog post.
