The Reserve Bank of India (RBI) has warned that the growing presence of big tech companies in the financial services may threaten competitiveness in the sector.
In its bi-annual financial stability report, the central bank of the country highlighted that the entry of major technology firms may lead to the creation of dominant players triggering challenges for antitrust rules.
RBI also noted that it may lead to operational risks as well as challenges regarding cybersecurity and data privacy.
“Specifically, concerns have intensified around a level playing field with banks, operational risk, too-big-to-fail issues, challenges for antitrust rules, cybersecurity and data privacy,” RBI said in the report.
The observation comes at a time when tech majors such as Amazon, Facebook’s Whatsapp and Google have already started providing basic payment services in India.
According to The Economic Times, RBI emphasised on handling the big companies by establishing an international standard based on coordination of rules.
The report added: “For central banks and financial regulators, financial stability objectives may be best pursued by blending activity and entity-based prudential regulation of Big Tech.
“Furthermore, as the digital economy expands across borders, international coordination of rules and standards becomes more pressing.”
Notably, the report coincides with the Indian Government’s ongoing tussle with the US tech giants, particularly microblogging site Twitter, over new IT rules.
Earlier this year, RBI announced its decision to boost risk-based supervision (RBS) of banks and non-banking financial institutions (NBFCs) in the country.