India’s anti-dirty money scheme caused hardship for rural communities — Singapore minister
26 Mar 2018

The Indian government’s controversial programme aimed at cracking down on black money has created hardship for some communities, a Singaporean government minister said.

Singaporean education minister Ong Ye Kung made reference to the demonitisation programmenin a speech on India’s changing financial landscape.

“A major and rather unorthodox step taken by the Indian government was the demonetisation of certain currency denominations,” he said, “While this has led to some hardship and disruption – particularly amongst the rural community where most transactions are cash-based – it has helped to accelerate the digitisation of financial services in India.”

Separately, he urged the two countries to strengthen banking and fintech ties.

The development of fintech has already ignited new frontiers for cooperation between both jurisdictions.

This includes Singapore’s key domestic payment system operators NETs working towards establishing a payment linkage with the National Payment Corporation of India.

In addition, Singapore is working with the state governments of Andhra Pradesh and Maharashtra to boost innovation cooperation and blockchain technologies, including cross border payments, he explained.

Singaporean banks could also reach out to underserved communities in India, particularly through digital platforms.

“For example, in 2016, DBS launched Digibank, a mobile-only bank in India. Digibank has no physical branches and utilises a suite of biometrics and AI technologies to provide digital banking services to consumers.

“In less than two years, more than 1.5 million customers have signed up for Digibank, and the customer base is expected to grow to five million by 2021.”

Singapore, like other regulators, is seeking to establish a fintech-friendly regulatory environment to encourage innovation and growth in the sector.

This includes the creation of a regulatory sandbox to facilitate live experimentation of new ideas.

“These may be in the form of untested technology or unconventional business models,” he explained, “within the sandbox, some regulations are suspended for the FinTech firm, for a stipulated period.

“This is a useful time-out, for them to test their ideas in a contained environment, with access to a limited pool of actual customers.”

Read more:

Hong Kong, UK fintech deals could ‘help flag-up fraud’

India: Corruption can’t be cleared with one stroke

Confessions of a compliance officer: How I handled dodgy demands

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