Advantage India
Robust
Demand
* Indian Fintech industry currently is US$ 111 billion and estimated to be at US$ 421 billion by 2029. India has the 3rd largest FinTech ecosystem globally.
* BCG predicts that the proportion of digital payments will grow to 65% by 2026.
* That demand seems particularly strong when it comes to the critical need of protecting consumer data, where incumbent banks have a trust advantage. Some super apps may also turn to banks for access to banking licenses and to meet other regulatory requirements.
Innovation in
Services
* In the recent period, technological innovations have led to marked improvements in efficiency, productivity, quality, inclusion and competitiveness in the extension of financial services, especially in the area of digital lending.
* Digitalization of Agri-finance was conceptualized jointly by the Reserve Bank and the Reserve Bank Innovation Hub (RBIH). This will enable delivery of Kisan Credit Card (KCC) loans in a fully digital and hassle-free manner.
* In Union Budget 2025, KYC process to be simplified; revamped Central KYC Registry to be rolled out in 2025.
Business
Fundamentals
* The Indian banking industry has seen robust growth, driven by strong economic expansion, rising disposable incomes, growing consumerism, and easier credit access.
* Digital modes of payments have grown by leaps and bounds over the last few years.
* As of June 2025, UPI dominates India’s digital payments landscape, serving 491 million users and 65 million merchants, and processing Rs. 24.03 lakh crore (US$ 240 billion) in June alone. With 675 banks onboard, it now accounts for 85% of all digital transactions.
Policy
Support
* The RBI has launched a pilot to digitalize KCC lending in a bid for efficiency, higher cost savings, and reduction of TAT. This is expected to transform the flow of credit in the rural economy.
* RBI reduced the policy repo rate to 5.5% in June 2025, along with a 25 basis points cut in Cash Reserve Ratio (CRR) to support liquidity and lending, which is expected to stimulate demand in the banking sector.
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